FHA Cash-Out Refinance
The fha cash-out refinance is one of the main ways to refinance. Here is the plain-English rundown for 2026.
How it works
An FHA cash-out refinance lets you tap equity up to 80% of your home's value, with the flexible credit standards FHA is known for - often qualifying scores in the 500s-600s with lender overlays. It requires a full appraisal and income documentation, and the loan carries both upfront and annual mortgage insurance premiums.
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 fha cash-out refinance?
- An FHA cash-out refinance lets you tap equity up to 80% of your home's value, with the flexible credit standards FHA is known for - often qualifying scores in the 500s-600s with lender overlays. It requires a full appraisal and income documentation, and the loan carries both upfront and annual mortgage insurance premiums.
- 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.