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 640 Credit Score

Refinancing With a 640 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

With a 640 score you comfortably qualify for conventional rate-and-term refinancing and FHA, though your rate sits above what 700-plus borrowers receive. Cash-out refinances are available up to 80% LTV on conventional and FHA. Shopping several lenders matters most in this tier because rate quotes vary widely on mid-range scores.

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 640 Credit Score — is it possible in 2026?: With a 640 score you comfortably qualify for conventional rate-and-term refinancing and FHA, though your rate sits above what 700-plus borrowers receive. Cash-out refinances are available up to 80% LTV on conventional and FHA. Shopping several lenders matters most in this tier because rate quotes vary widely on mid-range scores.
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.