Texas Home Equity Loan Compliance Quiz
Assess Your Home Equity Loan Compliance Knowledge
Ready to master Texas home equity loan compliance? This interactive quiz challenges legal professionals and finance students alike to test their knowledge of state-specific equity loan rules, fees, and disclosures. Whether you're studying for licensing or brushing up on compliance essentials, you'll gain deeper insight into borrower rights and documentation requirements. Feel free to compare your skills with related Texas Civil Procedure Rules Quiz or hone compliance strategies with an I-9 Compliance Quiz . Customize this quiz for your needs in our quizzes editor.
Learning Outcomes
- Analyze Texas home equity loan regulations and eligibility criteria.
- Identify Texas Constitution Article XVI Section 50 compliance requirements.
- Evaluate permissible fees, charge limits, and disclosure obligations.
- Apply documentation standards for borrower rights and lien priorities.
- Demonstrate mastery of state-specific compliance best practices.
Cheat Sheet
- Understand the 80% Loan-to-Value (LTV) Limit - Think of your home's value as a pie: Texas law lets you borrow up to 80% of its fair market value, keeping a 20% slice reserved for safety. So on a $200,000 home, your total mortgage debt can't exceed $160,000. Read the full article on National Mortgage Professional
- Recognize the 12-Day Cooling-Off Period - After you apply for a home equity loan, you get a mandatory 12-day "think-it-over" window before closing. This gives you plenty of time to brew coffee, review the fine print, and make sure you're 100% comfortable. View the FAQs at Texans Credit Union
- Identify Permissible Fees and the 2% Cap - Lenders can charge up to 2% of your loan amount in fees (appraisals and title insurance are extra). On a $100,000 loan, that's a maximum of $2,000 in fees, so you won't get hit with surprise costs. Learn more at Alston & Bird
- Know the Approved Closing Locations - You can only close your home equity loan at a lender's office, title company, or attorney's office - not at your kitchen table. This rule protects you by ensuring an official, supervised closing environment. Details from Texas Land Title Association
- Understand the Prohibition of Additional Collateral - In Texas, your homestead is the only collateral you can use for a home equity loan. You can't offer up your car or boat as a backup, so lenders focus solely on your house's value. Read Mortgage Law Insights
- Be Aware of the One-Year Rule Between Loans - After you close a home equity loan, you must wait 12 full months before taking out another one on the same property. This cooldown prevents over-leveraging your home and keeps debt manageable. Learn more on National Mortgage Professional
- Recognize the No Prepayment Penalty Clause - Texas law says you can pay off your home equity loan early without fear of penalty fees. Pay it off ahead of schedule and watch your interest savings grow - no extra charges attached! Check the FAQs at Texans Credit Union
- Understand the Documentation Requirements - You're entitled to your signed application and a HUD-1 Settlement Statement at least one day before closing. This gives you time to double-check all figures and terms before you commit. Review the guidelines on National Mortgage Professional
- Know the Repayment Structure - Home equity loans must be repaid in regular, equal installments - no more often than every 14 days and no less often than monthly - starting within two months of closing. This keeps your payment schedule predictable. See repayment details on National Mortgage Professional
- Be Aware of the Agricultural Property Exception - Since January 2018, agricultural properties in Texas can also secure home equity loans. If you've got farmland or ranchland, you can tap into that equity just like a regular homestead. Find out more at Alston & Bird