Yes, but first the title has to be in your name in a form a lender accepts. If you live in the house as your homestead, the Texas Constitution's home equity rules apply, including an 80 percent cap and every owner's consent. While probate is open, only the executor can pledge the house.
An inherited house can look like a bank account with walls. Heirs often want cash for repairs, to buy out a sibling, or to cover the estate's bills without selling. Texas lets you borrow against inherited real estate, but the steps run in a fixed order: someone has to have the legal power to sign, and if the house is a homestead, the Texas Constitution sets strict terms for the loan.
This guide covers the statewide rules. For the county offices that clear title and record liens in Tarrant, Dallas, Collin and Denton counties, see our DFW guide to borrowing against an inherited house. Nothing here is lending or legal advice; a lender and a Texas attorney can apply these rules to your facts.
Step one: the title has to be in shape
A lender is lending against the house, so it wants proof that the people signing the loan are the owners. While the record still shows only the deceased parent, expect the lender to ask who owns the house now. That proof usually comes from one of the probate routes: letters for an executor or administrator, a will probated as a muniment of title, a small estate affidavit, or a recorded heirship record. Our guides on getting heir property in your name and selling inherited property explain each route.
Expect the lender's title company to look closely at the chain from the parent to you. Missing heirs, unprobated wills and old liens all slow a loan down.
While probate is open, the executor borrows
Once letters are issued, Estates Code Sec. 101.003 gives the executor or administrator the right to possess the estate. Heirs cannot individually pledge the house during that time. The executor can borrow, within limits:
- Court-supervised estates. Sec. 351.251 lets a personal representative, under court order, mortgage estate property as needed to pay taxes owed by the decedent or the estate, administration expenses, approved claims, or to renew and extend an existing lien. Sec. 351.252 requires a sworn application, a posted citation inviting objections, and a court order setting the terms. Under Sec. 351.253, the loan term generally may not run past three years from the date original letters were granted, though the court may authorize an extension.
- Independent administrations. Sec. 402.054 confirms that an independent executor may take actions without court approval that a supervised representative could take, expressly including the authority to borrow money, within the purposes the Estates Code allows.
Estate loans exist to keep the estate running, not to hand heirs cash. If the goal is to pay debts and divide the rest, compare the cost of the loan with simply selling.
The parent's existing mortgage
Many inherited houses still carry the parent's loan. A common worry is that the bank will demand full payment because the borrower died. Federal law limits that. Under 12 U.S.C. 1701j-3(d), for a home with fewer than five units, a lender may not use a due-on-sale clause because of a transfer to a relative resulting from the borrower's death, or a transfer in which the borrower's spouse or children become owners.
That protection does not pause payments. If the loan goes unpaid, the lender can still foreclose. Our guide to stopping foreclosure on an inherited house covers that situation. The existing loan also matters for any new borrowing, because the home equity rules below count every debt already secured by the house.
Is the inherited house your homestead?
Texas protects homesteads more than most property. Article XVI, Section 50(a) of the Texas Constitution protects the homestead of a family or a single adult from forced sale for debts, except for a list of allowed debts. Section 50(c) says no lien on a homestead is valid unless it secures one of those listed debts.
So the first lending question is whether the house is your homestead. If you moved in and live there, it may be. If you live elsewhere and the house sits empty or is rented, ask your lender and attorney how it is classified. When a house is not your homestead, the constitutional home equity rules do not govern a loan against it, and the lender sets its own terms. Note that the property tax homestead exemption is a separate set of rules in the Tax Code; qualifying for one does not answer every lending question.
Texas home equity rules, in plain terms
If the inherited house is your homestead and you want cash out of it, the loan must fit Section 50(a)(6). Some of the key requirements:
| Rule | Section 50(a)(6) |
|---|---|
| Every owner and every owner's spouse consents in writing | (A) |
| The new loan plus all other debt on the house is no more than 80 percent of fair market value | (B) |
| No personal liability for owners or spouses, except for actual fraud | (C) |
| The lender can foreclose only by court order | (D) |
| Fees, apart from interest and bona fide discount points, capped at 2 percent of the original principal; third-party appraisal, survey and certain title costs are excluded from the cap | (E) |
| Generally must be the only debt secured by the house, unless the other debt is of an allowed type such as purchase money or taxes | (K) |
| Cannot close before the 12th day after the later of the application or the required notice, and not within a year of another home equity loan on the same house | (M) |
| Closes only at the lender's office, an attorney's office or a title company | (N) |
| Owner and spouse may cancel within three days after closing without penalty | (Q)(viii) |
The consent rule is the one that trips up heirs. If three siblings inherited the house and one lives there, a home equity loan still needs all three owners, and their spouses, to agree in writing.
Borrowing to buy out a sibling
One heir sometimes wants to keep the house and pay the others for their shares. Section 50(a)(3) lists an owelty of partition among the debts that can be secured by a homestead: a debt imposed against the whole property by a court order or by a written agreement of the parties to the partition. Whether a lender will fund a buyout this way, and how the agreement should be written, are questions for the lender and a real estate attorney. Our guide on a sibling who will not sell covers buyouts and partition more broadly.
Count the full cost before you borrow
A loan against an inherited house adds a monthly payment on top of the costs that already come with ownership: property taxes, insurance, repairs and utilities. Before signing, write down:
- the cash you actually need and what it is for,
- the monthly payment and how long it lasts,
- who among the heirs will make that payment,
- what happens to the debt if the family later decides to sell.
Liens on the house are normally paid from the sale price at closing, so borrowing now reduces what the heirs split later.
If selling makes more sense than borrowing
For many families, a sale is simpler than a new loan, especially when several heirs share the house. Cash Home Advisors is based in Fort Worth. We can close in 7–14 days and we pay all closing costs. Any existing mortgage is paid off from the price at the title company, and every heir sees the closing statement before signing.
Read about selling an inherited house in Texas, see how our process works, or request a cash offer. More guides are in our inherited property category.
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Frequently asked questions
Can I get a home equity loan on an inherited house I do not live in?
The home equity rules in Article XVI, Section 50 of the Texas Constitution protect a homestead. If the inherited house is not your homestead, a loan against it is a different kind of loan, and the lender's own rules decide whether and how much it will lend. Ask a lender which products it offers for property you do not occupy.
Do my siblings have to sign if I borrow against a house we inherited together?
For a Texas home equity loan, yes. Section 50(a)(6)(A) requires a written agreement with the consent of each owner and each owner's spouse.
How much can I borrow on an inherited homestead in Texas?
A home equity loan plus all other debts secured by the homestead may not exceed 80 percent of the home's fair market value on the date the loan is made. The lender and owner sign a written acknowledgment of that value.
Will the bank call my parent's mortgage due because I inherited the house?
Federal law, 12 U.S.C. 1701j-3(d), bars a lender from using a due-on-sale clause on a home of fewer than five units when it passes to a relative because the borrower died. The loan still has to be paid on schedule.
Sources
- Texas Constitution, Article XVI, Section 50 (homestead; home equity requirements)
- Texas Estates Code, Chapter 351 (Secs. 351.251-351.253 mortgaging estate property)
- Texas Estates Code, Chapter 402 (Sec. 402.054 independent executor may borrow)
- Texas Estates Code, Chapter 101 (Sec. 101.003 executor's right to possession)
- 12 U.S.C. 1701j-3, Preemption of due-on-sale prohibitions (Legal Information Institute)
General information, not legal or tax advice. Talk to a Texas attorney or CPA about your situation.