Using land for collateral

[cowboy43]

I bought 2.5 acres joining my property and paid cash for it, later I was going to use it for collateral to buy cattle, thinking it would not be part of my homestead, which is 150 acres. I have now found out that in Texas a homestead is up to 200 acres , it does not have to be part of your original parcel, it can even be in another county to be considered part of the homestead, and it can not be used for collateral because anything up to 200 acres cannot be foreclosed on. Just proves you never get too old to learn. :2cents:

 

[Jogeephus]

That's strange.

 

[TexasBred]

I bought 2.5 acres joining my property and paid cash for it, later I was going to use it for collateral to buy cattle, thinking it would not be part of my homestead, which is 150 acres. I have now found out that in Texas a homestead is up to 200 acres , it does not have to be part of your original parcel, it can even be in another county to be considered part of the homestead, and it can not be used for collateral because anything up to 200 acres cannot be foreclosed on. Just proves you never get too old to learn. :2cents:

Not true. Anything can be foreclosed on if you don't make the payments. You can now encumber your homestead with new debt. Can't remember exactly when the Texas Homestead law was changed but you can now refinance and even set up a line of credit using your homestead for collateral. In the past you could only borrow on the homestead for a home improvement loan or to pay a Federal Tax Lien.

 

[backhoeboogie]

I bought 2.5 acres joining my property and paid cash for it, later I was going to use it for collateral to buy cattle, thinking it would not be part of my homestead, which is 150 acres. I have now found out that in Texas a homestead is up to 200 acres , it does not have to be part of your original parcel, it can even be in another county to be considered part of the homestead, and it can not be used for collateral because anything up to 200 acres cannot be foreclosed on. Just proves you never get too old to learn. :2cents:

Not true. Anything can be foreclosed on if you don't make the payments. You can now encumber your homestead with new debt. Can't remember exactly when the Texas Homestead law was changed but you can now refinance and even set up a line of credit using your homestead for collateral. In the past you could only borrow on the homestead for a home improvement loan or to pay a Federal Tax Lien.

Yes. It seems like the acreage to go with what TB is telling you is 2 acres. My house and 2 acres (or so) are collateral for a line of credit. I went that route versus an equity loan. If I need a lump sum I can go get it and pay it back asap. Low interest and you do not pay interest when you pay it back. Buy 50 cows, sell them etc.

You can absolutely get an equity loan in TX now. That has not always been the case.

 

[cowboy43]

I was told this by one of Tex. largest Ag. loaning institutions, and did not pursue it any further, I will do more checking to find out what can be done.

 

[TexasBred]

I was told this by one of Tex. largest Ag. loaning institutions, and did not pursue it any further, I will do more checking to find out what can be done.

Go back and tell them to hire some qualified people. ;-)

 

[Jogeephus]

Just because they are large that doesn't mean they are bright. I recently had to explain to a vp at one of the largest banking institutions in the nation what a release was.

 

[backhoeboogie]

If they don't loan money, they don't earn any interest. They are always trying to talk me in to buying something. It is a joke with them any time I walk in. My '78 tractor and '79 caterpillar just won't die.

 

[Caustic Burno]

I bought 2.5 acres joining my property and paid cash for it, later I was going to use it for collateral to buy cattle, thinking it would not be part of my homestead, which is 150 acres. I have now found out that in Texas a homestead is up to 200 acres , it does not have to be part of your original parcel, it can even be in another county to be considered part of the homestead, and it can not be used for collateral because anything up to 200 acres cannot be foreclosed on. Just proves you never get too old to learn. :2cents:

You have been living under a rock their are people all over this state that have been foreclosed on since the bust and it was their homestead. Know of several around here. If you borrow money against the homestead to buy or build they can foreclose. They can't foreclose beacuse you don't pay your other bill's like in some other states.

The homestead has always been sacred in Texas. The Texas Constitution provides the homestead of a family or single adult is protected from forced sale for purposes of paying debts and judgments except in cases of purchase money, ad valorem taxes, owelty of partition (divorce), home improvement loans, home equity loans, and reverse mortgages. Further, even a permitted lien must be in writing and signed by both spouses in order to be valid. This protection, combined with the prohibition against garnishment of wages – contained in both Tex. Const. Sec. 28 and Tex. Prop. Code Sec. 42.001(b)(1) –

 

[1982vett]

Memory serves it all changed with all the folks that moved here from other states got all bunched up because they couldn't hock their homes to by more bling.... Was that during Madam Ann's watch?

 

[TexasBred]

Memory serves it all changed with all the folks that moved here from other states got all bunched up because they couldn't hock their homes to by more bling.... Was that during Madam Ann's watch?

Don't remember the exact year. Originally more or less designed to keep people from hocking the home place to use the money for other things. Good in a way but also more of gov't trying to dictate what you could do with your property. A lot of people had worlds of equity in their place and couldn't get a dime out of it without selling it.