Cash Out Refinance Waiting Period in Texas in 2025

The waiting period for a cash out refinance in Texas is 6 months after buying your home.

Discover Texas-specific refi waiting periods to plan your cash-out loans strategically, avoid surprises, and secure the best rates. I’ll also explain the key rules and requirements you need to know for a successful refinance.

What Is a Cash Out Refinance?

Also called a Section 50(a)(6) or a “Texas A6 loan,” a Texas cash-out refinance lets you turn home equity into cash by replacing your current mortgage with a larger one, so you receive the extra amount as a lump sum.

You make one mortgage payment instead of two monthly payments, simplifying your budgeting.

You may use the funds however you like, whether to consolidate your debts, finance home improvements, start a business, or secure a lower interest rate.

Texas-Specific Cash Out Refinance Waiting Periods

The Texas state government sets clear refinancing regulations for lenders and borrowers based on the Texas Constitution, amended in 2017.

As of 2025, homeowners qualify for refinancing when they meet these waiting periods:

6-Month Waiting Period After Home Purchase

You become eligible for a cash-out refinance 6 months after closing your original loan. 

One homeowner shares that they pulled $30,000 in cash out 6 months after buying in Dallas. He met the waiting period rule, cleared his title of a small second lien, and had funds wired within 45 days, enough for new flooring and bathroom updates without touching savings.

12-Month Waiting Period Since Your Last Refinance

Section 50(a)(6)(M)(iii) of the Texas Constitution states that borrowers cannot get another cash-out refinance for at least 12 months after closing one. 

There’s no limit to the number of cash-out refinance loans you can get as long as you wait a year between loans.

Other Waiting Periods

According to federal law, you must be free of bankruptcies and foreclosures for the past 12 months. 

However, many lenders enforce strict rules, requiring seven years following foreclosure and four years post-bankruptcy or short sale.

After submitting your application, a 12-day waiting period is required before closing the loan.

Key Takeaway: Texas law imposes specific waiting periods for cash-out refinances, requiring you to wait 6 months after home purchase, 12 months between refinances, 7 years after foreclosure, and 4 years after bankruptcy or a short sale. Plan ahead for these timeframes to avoid unwanted delays and lock in favorable rates.

Other Cash Out Refinance Rules and Regulations

Keep these guidelines in mind before applying for a refinance in the Lone Star State:

• 2% cap on lender fees: Closing costs must not exceed 2% of the loan amount (excluding appraisal, attorney costs, title insurance, and other external fees).
• 80% Loan-to-Value (LTV): While some states offer as high as 90% LTV, Texas limits home equity loans to 80% of your home’s market value. This safeguards the final 20% of your equity as a safety net.
• No Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) refinance: Federal programs don’t support cash-out refinancing in Texas. This means you can’t tap your home equity through an FHA or a VA cash-out refinance.
• All liens must be paid off: Before completing a cash-out refinance, be sure to pay off all outstanding liens against your property, including second mortgages, home equity lines of credit (HELOC), or tax liens.

Cash Out Refinancing Requirements in the U.S.

Most lenders require the following for a cash out refi:

• Minimum 20% equity in your home
• Credit score of 620 or higher
• Debt-to-income (DTI) ratio below 43% (up to 50% DTI if you have a high credit score or substantial liquid reserves)
• Primary residence, not an investment property or a second home (agricultural homesteads or farms qualify for cash-out loans in Texas)

Pro Tip: Boost your credit score to secure better repayment terms. Be sure to pay your monthly mortgage on time to show lenders you’re creditworthy. Your application may get rejected if you have missed payments.

Leverage Your Home Equity Through Refinancing

If you’re eligible for a cash out refi, work with an experienced mortgage lender to know the latest rules and ensure compliance with state-specific laws.

At Texas United Mortgage, we provide personalized guidance from start to finish. Our mortgage experts will help you choose the right refinance strategy that fits your financial situation.

Have questions about the cash out refinance waiting period in Texas? Contact us now, and we’ll walk you through every step until closing!

Next, read our complete guide to cash out refinancing so you know exactly what to do.