Thinking about taking your Keller kitchen from builder-basic to breathtaking, or giving your primary bath a spa-level refresh? Choosing how to fund it is just as important as choosing your finishes. In Texas, the rules for tapping home equity are unique, which can make HELOCs and cash-out refinances feel confusing. Below, you’ll see how each option works in Keller, what Texas law allows, what payments might look like, and a simple way to decide which path fits your project. Let’s dive in.
Keller remodel costs and ROI basics
Minor kitchens often run about the mid 20s to mid 30s, with major kitchen projects frequently exceeding 50k and sometimes 75k or more. Midrange bath remodels commonly land in the low to mid 20s. These national ranges help you size whether a line of credit or a lump sum makes sense for your Keller home. Industry cost guides can be a helpful starting point when you talk with contractors.
For resale, smaller exterior and targeted interior projects tend to recoup a higher percentage than large upscale overhauls. That means some projects are best for personal enjoyment, while others can support future value. Review high-level ROI trends from Remodeling Magazine as summarized by Fixr’s Cost vs. Value analysis to set expectations.
Local market trackers place typical Keller home values in the high 600s. That context matters because Texas caps how much equity you can borrow for a homestead.
Texas rules that change your choice
Texas homestead rules shape both HELOCs and cash-out refinances. Knowing these will save you time and surprises.
The 80 percent cap on total liens
Texas requires you to keep at least 20 percent equity after a home-equity loan. Your total mortgage balances after closing cannot exceed 80 percent of your home’s fair market value. This applies to both HELOCs and cash-out refinances under Section 50(a)(6). See the Texas Real Estate Research Center’s summary of the rule and fee limits here.
Only one Section 50 loan at a time
You generally cannot have both an active Texas HELOC and a Texas cash-out refinance on your homestead at the same time. Texas treats both as Section 50(a)(6) loans, and the state allows only one such lien at once. Get clear guidance on the “one-loan” rule and HELOC specifics from this legal overview.
Fees, waiting period, and attorney/title review
Texas caps certain lender fees on Section 50 loans, typically at 2 percent of the original principal. Third-party costs like appraisal, title insurance, and attorney fees still apply. The state also requires specific notices and a cooling-off period before you can close, and closing documents affecting title are prepared or reviewed by a Texas-licensed attorney. Plan for these steps in your timeline, as outlined in this Texas process guide and the Texas Real Estate Research Center’s overview.
Minimum HELOC draw and access rules
Texas HELOCs include a minimum single draw amount and do not allow credit-card-style access. Lenders also structure draw periods and repayment periods differently. Review HELOC mechanics and state-specific draw rules in this Texas HELOC summary.
Federal program limits in Texas
Some government-backed cash-out options available in other states are not available for Texas homesteads because of conflicts with Section 50. For example, many VA cash-out refinances are not permitted on Texas homesteads. Learn more in this Texas VA cash-out explainer.
HELOC vs. cash-out: how each works
HELOC basics
A HELOC is a revolving line secured by your home. You draw funds as needed during the draw period, often with interest-only payments at a variable rate. In Texas, HELOCs are Section 50(a)(6) loans, so the 80 percent cap, one-loan rule, and draw restrictions apply, as covered in this legal overview.
Cash-out refinance basics
A cash-out refinance replaces your existing mortgage with a larger fixed-rate mortgage and gives you the difference as a lump sum. You get rate certainty and a set amortization schedule. Texas Section 50 rules on total liens and fees still apply, and not all federal cash-out programs are available in Texas.
Today’s rate landscape
Recent national surveys showed the average 30-year fixed mortgage near 6.27 percent in mid-October 2025. That provides a ballpark for cash-out refinance rates. See reporting on mortgage averages from the Associated Press.
HELOC averages were in the high 7s to low 8s in early October 2025, and HELOC rates are usually variable. For a snapshot of current HELOC trends, review Bankrate’s coverage summarized here. In short, fixed cash-out rates may be lower than variable HELOC rates right now, but HELOCs can reduce near-term payments during interest-only periods.
How much could you borrow in Keller?
Let’s use a simple example. If your home value is around 639,898 and Texas caps total liens at 80 percent, your combined loan limit would be about 511,918. If your current mortgage balance is 300,000, your potential additional borrowing room would be roughly 211,918 before fees. The 80 percent cap and fee limits are explained by the Texas Real Estate Research Center.
What payments might look like on 50,000
- HELOC, interest-only at 8.0 percent: about 333 per month during the draw period.
- HELOC, fully amortizing over 15 years at 8.0 percent: about 478 per month.
- Cash-out refinance, 30-year fixed at 6.27 percent: about 309 per month on 50,000 over 30 years.
A cash-out refinance can produce a lower fixed payment on the same principal in today’s market. A HELOC can be easier on cash flow early if you pay interest-only, yet the rate can change. Rate quotes and your amortization terms will drive your exact payment.
Which option fits your project?
When a HELOC may make sense
- You want flexibility to draw funds in stages for a multi-phase remodel.
- You prefer lower payments during the draw period and accept variable-rate risk later.
- Your project scope may change, and you want to borrow only what you use. See Texas HELOC mechanics and limits in this legal summary.
When a cash-out refinance may make sense
- You want one predictable fixed payment for many years.
- You need a large lump sum on day one and want a set amortization schedule.
- Fixed mortgage rates are attractive compared with variable HELOC rates, as shown by recent mortgage averages.
Timeline and process in Texas
- HELOC: plan for several weeks. You will have application, appraisal, title and attorney review, plus required notices and the state’s waiting window before closing. Learn more about Texas procedures in this HELOC rules guide.
- Cash-out refinance: many lenders quote about 30 to 45 days in normal conditions. Texas still requires the statutory cooling period and attorney/title review, so build in a little extra time.
Smart questions to ask your lender and contractor
To lenders
- Is this a Texas Section 50(a)(6) loan, and how does the 80 percent cap affect my limit? Review the state’s caps and fee limits with the Texas Real Estate Research Center.
- What is the APR and how is the HELOC rate set during and after the draw period? See current HELOC trends here.
- Which fees are subject to the Texas 2 percent lender-fee cap and which third-party costs are not?
- How long will closing take with the required notices and attorney/title review in Texas? See a process overview here.
To contractors
- Can you provide a detailed scope, phased draw schedule, and references for similar projects? A phased plan pairs well with a HELOC. Use national cost ranges as a planning benchmark from this kitchen remodel cost guide.
- What contingency should I budget for overruns? Many homeowners set aside a cushion on larger projects.
The bottom line for Keller homeowners
Both HELOCs and cash-out refinances can fund a beautiful Keller remodel. Texas law adds important guardrails, especially the 80 percent cap, the single Section 50 loan rule, the 2 percent lender-fee limit, and required waiting and attorney review. Your best fit comes down to flexibility versus rate certainty, your project size, and how long you plan to hold the mortgage.
If you want a trusted local perspective on how a remodel could support your home’s value before you borrow, reach out to the Day & Cantu Luxury Homes Group with eXp Luxury. Our team can help you weigh value impacts in Keller and connect you with experienced Texas lenders and contractors.
FAQs
Can I have both a HELOC and a cash-out refinance in Texas?
- Generally no. Texas typically allows only one active Section 50(a)(6) home-equity lien on your homestead at a time.
How much equity do I need to borrow against my Keller home?
- You must keep at least 20 percent equity after closing. Texas caps total liens at 80 percent of your home’s fair market value, plus you must meet lender underwriting.
Are HELOC payments lower than a cash-out refinance?
- During the interest-only draw period, a HELOC payment can be lower. Over time, a fixed-rate cash-out may cost less on interest if fixed rates are below variable HELOC rates. Compare actual quotes.
Is the interest tax deductible for remodel projects?
- Interest on home equity borrowing may be deductible only if the funds are used to buy, build, or substantially improve the home that secures the loan. Consult a tax professional for your situation.
How long does closing take in Texas for these loans?
- Expect several weeks for a HELOC and roughly 30 to 45 days for a cash-out refinance, plus the state’s required notices, cooling period, and attorney/title review.
Will a HELOC or cash-out affect my Tarrant County homestead exemption?
- Taking a loan usually does not remove your homestead exemption by itself. For property-tax specifics and any updates, contact the local appraisal district or review state guidance.
