How much equity do I need?

A rate-and-term refinance can work with as little as 3-5% equity. Dropping PMI takes about 20%, and a conventional cash-out requires you to keep 20% (an 80% loan-to-value cap).

Will refinancing hurt my credit?

The hard inquiry causes a small, temporary dip. Rate-shopping multiple lenders within a ~45-day window counts as a single inquiry for scoring.

Refinance With a 620 Credit Score

Refinancing With a 620 Credit Score is more doable than many homeowners assume. Below is what lenders actually require here and how to put your strongest file forward.

The short answer

A 620 score is the practical floor for a conventional rate-and-term refinance in 2026, opening Fannie Mae and Freddie Mac options. Pricing improves sharply above 660, so expect a rate premium at exactly 620. FHA remains a competitive alternative, and cash-out is capped at 80% LTV on either program.

What refinance lenders look for

Equity: ~3-5% for a rate-and-term, 20% to drop PMI, and 20% kept for a cash-out (80% LTV cap).
Credit: roughly 620+ for conventional; FHA and VA streamlines do not re-check your score.
Debt-to-income: generally under ~43-50% including the new payment.
Break-even: closing costs divided by monthly savings — refinance only if you will keep the home past it.

Refinance rates and guidelines change. Join the free Refi Rate Guide alerts to hear when the rules or rates that affect this situation move.

Your next steps

Pull your credit, estimate your home's value and current balance to gauge equity, and get quotes from two or three lenders the same day so the comparison is apples-to-apples. Then run the break-even before you commit.

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Frequently Asked Questions

Refinance With a 620 Credit Score — is it possible in 2026?: A 620 score is the practical floor for a conventional rate-and-term refinance in 2026, opening Fannie Mae and Freddie Mac options. Pricing improves sharply above 660, so expect a rate premium at exactly 620. FHA remains a competitive alternative, and cash-out is capped at 80% LTV on either program.
How much equity do I need?: A rate-and-term refinance can work with as little as 3-5% equity. Dropping PMI takes about 20%, and a conventional cash-out requires you to keep 20% (an 80% loan-to-value cap).
Will refinancing hurt my credit?: The hard inquiry causes a small, temporary dip. Rate-shopping multiple lenders within a ~45-day window counts as a single inquiry for scoring.