Texas does things a little different than most states, especially when it comes to private-property rights.
For example, we have strict consumer protections related to home equity lending which are so important to Texans that voters actually enshrined them in the state constitution back in 1997.
Much has changed in the housing market in the past 20 years, and now it’s time for our rules to catch up. Proposition 2 on the November ballot is our chance to make this change.
Prop 2 will help Texas homeowners like you in several ways.
Prop 2 will make smaller loans available to more Texans. Right now, there’s a 3 percent limit on fees that can be charged to create a home equity loan. That means if you’re looking to get a home equity loan of $10,000, you can only be charged up to $300 for all the fees associated with the loan.
But loan fees can add up fast, so lenders aren’t always able to make these kinds of loans for relatively low amounts.
Prop 2 would actually lower that fee limit from 3 percent to 2 percent; and take three expenses—the appraisal, title insurance premium, and survey—out of the equation, allowing a borrower to pay for them separately. This means smaller home equity loans will be more readily accessible for Texans.
Prop 2 also makes several other small changes that will make it easier for homeowners to access their hard-earned home equity.
But there’s also one important thing Prop 2 doesn’t do.
Remember those strong protections I mentioned? Texas prohibits borrowing more than 80 percent of your home’s value. This means 20 percent of your home’s equity will always be protected. Other states will let homeowners borrow 100 percent (or even more) of their home’s equity, putting their homes at risk when the market changes.
Nothing in Prop 2 changes the constitutional protections Texans have when borrowing on their home equity.
You may not need to tap into your home’s equity right now. But what about when your child goes to college, if you want to renovate your home, or if you have an unexpected expense, like medical bills? These are all common reasons Texans take out home equity loans.
You may never need or want to take out a home equity loan, but don’t you want the peace of mind to know that you could if you needed to?
Early voting is Oct. 23-Nov. 3, and Election Day is Nov. 7. Visit co.hidalgo.tx.us/elections to find polling places.
Whether you vote early or on Election Day, vote for Proposition 2. You work hard to build up the equity in your home. You should be able to access it when you need it.
