Cash-Out Refinance
Replace your mortgage with a larger one and pocket the difference in cash from your equity.
How it works
A cash-out refinance replaces your mortgage with a larger loan and gives you the difference as cash to use for renovations, debt payoff, or other needs. On a primary residence you can borrow up to 80% of the home's value (100% with VA). It requires an appraisal, documented income, typically 620+ credit, and six months of seasoning.
Key things to know
- Weigh the new rate and term against your current loan — a refinance resets the clock.
- Budget 2-5% of the balance in closing costs (or roll them in for a higher rate).
- Find your break-even: costs divided by monthly savings.
- Cash-out is capped at 80% LTV conventional/FHA; VA cash-out can reach 100%.
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Frequently Asked Questions
- What is the cash-out refinance?
- A cash-out refinance replaces your mortgage with a larger loan and gives you the difference as cash to use for renovations, debt payoff, or other needs. On a primary residence you can borrow up to 80% of the home's value (100% with VA). It requires an appraisal, documented income, typically 620+ credit, and six months of seasoning.
- What does it cost?
- Most refinances run 2-5% of the loan in closing costs. A no-closing-cost version trades those fees for a slightly higher rate.