Can we Payoff a home equity loan with a true mortgage from another financial institution?

My wife refinanced our home through Wells Fargo Financial about 10 years ago. She thought she was getting a regular mortgage, but it ended up being a $100,000 Equity Loan at about 6%. Somehow she believes that in Texas it is ILLEGAL to refinance our home with a TRUE MORTGAGE at a lower interest rate from another financial institution to pay off that Equity Loan to Wells Fargo. Is this true? What can she do? Who can she call?

1 Answer

No, that is not true. You can refinance with any lender but there are some guidelines that you must meet. First, you can only refinance to 80% of the appraised value. So, if you currently owe $100,000, your home must appraise for a minimum of $125,000. Next, once you have a equity loan in Texas, anytime you refinance it is considered another equity loan whether you pull more cashout or not. This shouldn’t be a factor for you since the current loan is a equity loan. I work exclusively in Texas, so feel free to call me.