Allandale Mortgage Broker: Adding On Without Giving Up Your Rate
Allandale homes generally trade between $600,000 and $1 million, most of them single-story post-war houses on flat, tree-lined lots in north central Austin.
Those flat lots and modest original floor plans make Allandale one of the neighborhoods where owners most often add on rather than move — a second story, a primary suite, a larger kitchen. And many of those owners are holding a first mortgage at a rate well below today's, which they would very much like to keep.
That is the question this page answers: how to finance a remodel or addition without refinancing a low-rate first mortgage.
Buying or refinancing in Allandale? We shop your file across a panel of wholesale lenders.
Three ways to pay for an addition
A home equity line or loan
A second lien — a home equity line of credit or a fixed home equity loan — leaves your first mortgage untouched. You borrow against equity, and only the new money carries today's rates.
Texas limits it tightly. On a homestead, total borrowing — first mortgage plus the new loan — cannot exceed 80% of the home's current value. If your first mortgage is already large relative to value, the room may be small.
The value used is today's value, before the addition. That is the main limitation for a large project.
A cash-out refinance
A cash-out refinance replaces your first mortgage with a larger one and pays you the difference.
It reprices the entire balance. If your existing rate is well below the current market, the cost of losing it on the whole loan can dwarf the cost of the project. Run the numbers on the blended rate before choosing this path.
It is the right tool when your current rate is at or above the market, or when you want to consolidate the first mortgage and the project into one payment.
A renovation loan on the after-remodel value
A renovation loan is sized on what the home will be worth after the work, based on plans, a contractor's bid and an as-completed appraisal. For a large addition — a second story, say — it can raise far more than a home equity line limited to today's value.
It usually replaces the first mortgage, so the same rate trade-off as a cash-out refinance applies.
Texas treats loans for improvements to an existing homestead under their own rules, with a written contract signed by the owners and required waiting periods. Not every lender handles them; the ones that do handle them routinely.
The Texas home equity rules, in brief
Texas has some of the most protective home equity rules in the country, written into the state constitution. The ones that matter most for a remodel:
The 80% combined limit described above.
A waiting period. You receive a required notice at least 12 days before a home equity closing, and you have a right to cancel for three days after it.
A cap on certain fees, set as a percentage of the loan amount.
One home equity loan per year. Texas generally limits you to one home equity loan in a 12-month period.
Minimum draws on a line of credit. Texas home equity lines set a minimum amount for each advance, and they cannot be accessed with a debit or credit card.
Plan the timeline around these. A contractor who needs a deposit next week is not compatible with a home equity closing that has not started.
What adds value on a flat Allandale lot
Square footage on a single story tends to appraise well here, because the neighborhood's original stock is single-story and buyers seek it out.
Second stories add the most space for the lot, but they have to clear Austin's height and setback limits and any subdivision restrictions. A structural assessment of the existing foundation comes first.
Protected trees are common on older lots and can shape where an addition can go.
Taxes in Allandale
Allandale is inside the City of Austin. A typical address carries the City of Austin, Travis County, Austin ISD, Austin Community College and Central Health rates — generally around 1.8% to 2.1% of assessed value combined.
An addition raises the assessed value, usually in the year after it is completed. Your homestead exemption and the 10% annual cap on homestead increases will phase part of that in, but plan for the higher bill.
Verify the parcel with the Travis Central Appraisal District.
Where people buy
The streets between Shoal Creek Boulevard and MoPac carry some of the larger lots and the most additions and rebuilds.
Around Northwest District Park, the neighborhood's recreation center and pool anchor the middle of the area.
Toward Burnet Road, the eastern edge meets a busy commercial corridor of restaurants and shops, and the lots are somewhat smaller.
The southern blocks near Northland Drive carry some of the earliest post-war homes in the neighborhood.
To the west across MoPac, Northwest Hills covers similar prices on steeper terrain.
The neighborhood
Allandale developed mostly in the 1950s and early 1960s, when north central Austin filled in with single-story ranch and brick homes on flat, regular lots. Much of that original stock survives, alongside additions and a growing number of rebuilds.
Shoal Creek runs along the western side of the neighborhood, and Northwest District Park sits near its center with a pool, sports fields and a recreation center. Burnet Road, the eastern boundary, is one of the city's best-known dining corridors.
Not sure which fits? Compare every loan program we place, or see our refinance options.
Frequently asked questions
Can I finance an addition without refinancing my mortgage? Yes, with a home equity line or home equity loan as a second lien. It leaves your first mortgage and its rate in place. In Texas, total borrowing on a homestead is capped at 80% of the current value.
Is a HELOC or a cash-out refinance better for a remodel? If your current rate is well below the market, a home equity line usually costs less because only the new money carries today's rate. If your rate is at or above the market, a cash-out refinance can make sense.
Can I borrow against what my home will be worth after the remodel? A renovation loan is sized on the as-completed value, based on plans and a contractor's bid. It usually replaces the first mortgage.
How long does a Texas home equity loan take? Texas requires a notice at least 12 days before closing and a three-day right to cancel afterward, so plan on a longer timeline than a standard refinance.
How often can I take a home equity loan in Texas? Generally once in a 12-month period.
What are property taxes in Allandale? A typical City of Austin address in Austin ISD carries a combined rate around 1.8% to 2.1% of assessed value. Additions raise the assessed value once completed.
Compare the three before you call the contractor
The cheapest way to pay for an Allandale addition depends on your current rate, your equity and the size of the project. Send us your current mortgage balance and rate and the project budget, and we will compare all three.
Start your application · Run the numbers · Call 737-347-1314
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