Cash-Out Refinance

A cash-out refinance replaces your existing mortgage with a new, larger loan and pays you the difference in cash at closing. If your home is worth $600,000 and you owe $300,000, an 80% cash-out refinance would create a $480,000 loan and put roughly $180,000 (less closing costs) in your pocket. You get one new mortgage with one payment.

Conventional cash-out refinances typically allow up to 80% of the home’s appraised value (75% on many investment properties), so you need to retain at least 20% equity. FHA cash-out also caps at 80%, while VA cash-out refinances can reach 90–100% of value for eligible veterans. We’ll estimate your maximum cash-out before you pay for anything.

Most conventional cash-out programs start at a 620 score, with the best pricing at 700+. FHA cash-out generally starts around 580–620 depending on the lender, and VA cash-out is often 580–620 as well. Because we shop multiple wholesale lenders, a score that one lender declines is frequently approved by another.

Cash-out refinance rates run slightly higher than a rate-and-term refinance because the loan carries more risk, and closing costs typically fall between 2% and 5% of the loan amount. Those costs can usually be rolled into the new loan. We run a break-even analysis so you can see exactly when the savings outweigh the cost.

It depends on your first-mortgage rate. If your current rate is low, a HELOC or second mortgage lets you tap equity without giving that rate up. If today’s rates are at or below your current rate, or you want one fixed payment and a large lump sum, a cash-out refinance usually wins. We price both side by side on every file.

Anything — the most common uses are paying off credit cards and other high-interest debt, home renovations, college tuition, funding a business, or a down payment on an investment property. Because the loan is secured by your home, the rate is typically far below credit cards or personal loans.

Usually yes. Conventional cash-out refinances generally require you to have owned the property at least six months (12 months in some cases), FHA cash-out requires 12 months of on-time payments, and VA cash-out requires a seasoning period as well. We’ll confirm your eligibility date up front.

Most cash-out refinances close in 21 to 30 days. An appraisal is typically required, and federal rules include a three-business-day rescission period after signing on primary residences before funds are disbursed.

Often, yes. FHA and VA cash-out programs are more forgiving of lower scores, and Non-QM and bank statement options exist for borrowers with credit events or non-traditional income. The tradeoff is a higher rate or a lower loan-to-value — we’ll show you the real numbers before you commit.

Interest may be deductible when the funds are used to buy, build, or substantially improve the home securing the loan. Cash used for other purposes, such as paying off credit cards, generally is not deductible. Confirm your situation with a tax professional — we’ll provide the documentation you need.