Finance
A Texas property owner refinancing their mortgage pays off their existing $250,000 balance and gets a new $280,000 mortgage. The $30,000 difference is:
ATax-free income
BA cash-out refinance that the borrower receives as cash (subject to Texas constitutional restrictions on homestead cash-out)✓ Correct
CAn additional deposit to the escrow account
DA gift from the lender
Explanation
A cash-out refinance in Texas allows a homeowner to access equity by refinancing to a higher loan amount. On homestead property, Texas constitutional restrictions (Article XVI § 50) limit cash-out to 80% LTV and impose other restrictions.
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