This means that if you have a 200K valued home then you can only borrow up to 160,000.  The balance of your current mortgage will be what is available to your in cash.  Example: $200,000 Appraised Value @ 80% Max Loan = $160,000 Max LTV.  Your current loan balance is: $135,000 minus the $160,000 = $25,000 you would get at closing.  When you close the money is paid directly to you.  “HOME EQUITY” means the check is made out to “YOU”.  So “Home Equity” isn’t the best option for these types of needs!

HOME IMPROVEMENT LOANS are DIFFERENT IN TEXAS.   Home Improvement Loans, when it FUNDS, the checks are paid to YOU and the BUILDER, so the EQUITY underwriting requirement DOES NOT APPLY.   What most TEXAS lenders do though, is underwrite “HOME IMPROVEMENT” loans similar to “HOME EQUITY” loans, which is requiring “EQUITY”. 

Our company WORKS WITH 2 of the ONLY lenders in the United States that offer “HOME IMPROVEMENT” loans with NO EQUITY. 

This is very important to new “Home Owners” who have established NO equity or very little equity.

OUR LOANS ARE SECURED IN A 2ND and even as a 3RD LEIN MORTGAGE, WITH NO PREPAYMENT PENALTIES, FINANCED FOR 20 YEARS WITH FIXED RATES WITHOUT EQUITY.

The rates with “NO EQUITY” start out at 7.5% for Pool Loans and 7.75% on home improvement projects with the home.  IF YOU HAVE VERIFIABLE EQUITY THE RATES ARE LOWER.

Tax Deductible Interest on a Home Improvement Loan
Interest expenses on a home equity loan may or may not be tax deductible. But, home improvement loans, assuming the loan-to-value (LTV) is 100% or less, most often result in a home improvement tax credit. This results from the classification of home improvements as a valid reason to use a home equity loan to allow you to deduct your interest cost.
While it’s true that a straight home equity loan is probably easier to get, (easier defined as faster with less documentation), the interest is not automatically tax deductible, even though it is a loan with real estate as collateral. Since a home equity loan on your primary residence is not used as a component in the purchase transaction, the Internal Revenue Service has ruled that the purpose of the cash out from this loan is deductible only when it fits certain circumstances.
Home improvements have been determined to be an excellent reason, giving you one potential advantage of using a home remodeling loan to achieve your goal in lieu of a normal home equity loan. Since using an equity home improvement loan for your project will provide you with good documentation to support your tax deduction decision, this loan can be the best choice if you want to be comfortable with your tax issues.