A Texas property valued at $525,000 has a first mortgage of $300,000 and a home improvement loan of $50,000. Under the Texas Constitution's 80% LTV cap, how much additional home equity borrowing capacity is available?
Correct Answer
D) $70,000
Maximum total liens = $525,000 × 0.80 = $420,000. Current liens = $300,000 + $50,000 = $350,000. Available = $420,000 − $350,000 = $70,000.
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In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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Previous Question
Miguel takes out a $200,000 home equity loan on his Texas homestead at 6% annual interest. Under Texas law, home equity loans cannot include prepayment penalties. If Miguel pays off the loan after exactly 8 months, how much total interest will he owe?
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A Texas lender charges the maximum allowable fees on a $150,000 home equity loan secured by a homestead. Under Texas Constitution Article XVI, Section 50(a)(6)(E), what is the total fee amount?