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"Verbal agreement" for home equity...

1,204 Views | 5 Replies | Last: 3 yr ago by hbc07
Raptor
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Our friends went through the preliminary process of getting a home equity loan through Texans Credit Union and they are now looking at other options like refinancing and pulling out cash.

Notes: They are getting 4.2% for 20 years for $100k For the home equity. They have $144k left on a 30 (28) year mortgage at 5%.

I told them to explore refinancing, but Texans Credit Union told them they have a "verbal agreement" on the home equity. Is there anything legally binding them to going through with the home equity loan?

They haven't physically signed or docusigned anything.
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dallasiteinsa02
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Probably only with that lender. They may not want them to change programs.
Jay@AgsReward.com
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AG
With a 5% rate they should do a first lien cash as they would get a much better rate on their existing loan as well as the not having the higher rate on the second. And no they are under no obligation.
hbc07
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Most likely no. Statute of frauds in Texas requires real estate contracts over $50k (IIRC) to be in writing in order to be enforceable.
TriAg2010
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Raptor said:

I told them to explore refinancing, but Texans Credit Union told them they have a "verbal agreement" on the home equity. Is there anything legally binding them to going through with the home equity loan?



I would make a verbal offer to kiss my ass. If that's their customer service before signing a contract, I'm not looking forward to the after.
Raptor
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Thank you everyone.

Jay, I passed this info along to them.


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hbc07
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In the event it's needed, the statute is Tex. Bus. & Com. Code sec. 26.02(b)
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