First Mortgage and HELOC
First mortgage and HELOC: what should I compare before FHA cash-out?
Bring both loan statements and ask your Texana loan officer what written estimates are available that separate each proposed payoff, refinancing costs and any cash remaining. After you apply, you will receive a Loan Estimate showing the proposed loan terms and costs. Confirm which debts the proposed financing can include before treating either loan as paid off.
Both balances belong in the comparison
A HELOC or home-equity loan commonly sits alongside another mortgage secured by the same home. CFPB describes these as “common examples of second mortgages.” Paying attention only to the first mortgage leaves out another debt secured by your property. CFPB second-mortgage guidance; reviewed 09/11/2024, modified 09/13/2024.
Ask that the written estimates separately identify:
- Your first-mortgage payoff.
- Your second-mortgage or HELOC balance and proposed treatment.
- Closing costs and mortgage insurance.
- Any cash remaining for you.
Money allocated to a debt payoff cannot also be cash available to spend. The Texana FHA cash-out overview separately explains estimated equity, the amount approved after review, and closing proceeds after lien payoffs and charges.
Replacing loans does not automatically save money
Cash-out refinancing replaces your existing mortgage. CFPB explains: “you replace your existing mortgage with a bigger mortgage.” Compare closing costs and the replacement interest rate before choosing. CFPB refinancing explanation; reviewed 06/27/2024, modified 06/30/2025.
Compare keeping your current loans with the proposed financing using your own statements and the Loan Estimate. Include mortgage insurance and how long you would repay the debt. Spreading a shorter-term debt over a longer repayment period can increase the total you pay; CFPB cautions about trading short-term debt for long-term debt at a higher cost. CFPB second-mortgage guidance; reviewed 09/11/2024.
For the first conversation, have statements for both loans and explain whether your goal is paying off the HELOC, receiving additional cash, or both. Ask which payoff documents are needed, and whether paying off the HELOC would require closing the account or whether it could remain open.
Request an FHA cash-out review (submitting an inquiry is not an application) and tell us you have both a first mortgage and a second mortgage or HELOC.
Texana Bank Mortgage, a division of Texana Bank, N.A. | (888) 272-8264 | NMLS #407536 | Equal Housing Lender. Subject to credit approval. This is not a commitment to lend.