A Texas homestead is valued at $500,000 with no existing liens. The homeowner takes the maximum home equity loan allowed. All of the following are correct statements about this loan EXCEPT:
Correct Answer
D) At a 6% annual rate, the annual interest would be $30,000
The annual interest on a $400,000 loan at 6% would be $400,000 × 0.06 = $24,000, not $30,000. The $30,000 figure incorrectly uses the full property value ($500,000 × 0.06 = $30,000) instead of the loan amount.
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The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
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- → A Texas property owner defaults on both a first mortgage and a second-lien home equity loan. The first mortgage lender forecloses and sells the property at the trustee's sale. Under Texas law, what happens to the second-lien home equity loan?
- → Under Texas foreclosure law, a property is sold at a trustee's sale on the first Tuesday of the month. The winning bidder pays the full purchase price. Under Texas Property Code, when does the bidder receive a trustee's deed?
- → In Texas, the standard security instrument for real estate loans is a deed of trust rather than a mortgage. Which parties are involved in a Texas deed of trust?
- → Under Texas Constitution Article XVI, Section 50(a)(6), a home equity loan on a Texas homestead must comply with numerous constitutional requirements. All of the following are required provisions of a Texas home equity loan EXCEPT:
- → Under Texas Constitution Article XVI, Section 50, all of the following liens may be enforced against a Texas homestead EXCEPT:
- → A Texas homeowner closes on a home equity loan on January 15. The loan proceeds are not actually disbursed until January 18, three days after closing. The borrower exercises the right of rescission on January 26. Under Texas Constitution Article XVI, Section 50(a)(6), is this rescission timely?
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A Texas homestead valued at $380,000 has a first mortgage of $144,000. The homeowner takes the maximum home equity loan at 6.5% annual interest. What is the annual interest on this home equity loan?
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A Texas homeowner takes a $180,000 home equity loan at 5% annual interest. The lender charges the maximum allowable 3% fee. What is the total of fees plus first month's interest?