Refinance
Your home equity, put to work.
A cash-out refinance replaces your mortgage with a larger one and pays you the difference. Used well, it can consolidate expensive debt or fund a project that adds value.
- Conventional LTV up to
- 80%
- Ownership typically
- 6 to 12 months
- Common uses
- Debt, repairs, reserves
- Rate lock
- Up to 120 days
How it works
You take out a new mortgage for more than you owe. The new loan pays off your current mortgage and closing costs, and the rest comes to you in cash at closing.
How much you can borrow depends on your home's value and the loan type:
- Conventional: generally up to 80% of the home's value on a primary residence.
- FHA: generally up to 80%, with ownership and occupancy requirements.
- VA: may go higher for eligible veterans, depending on the lender.
- Second homes, investment properties and jumbo loans: usually lower limits.
A simple example: a home that appraises at $500,000 with a $250,000 balance. At 80%, the new loan could be up to $400,000. That is up to $150,000 before closing costs.
Smart ways to use it
- Paying off high-interest credit cards or personal loans
- Renovations that add value or protection, such as impact windows or a new roof
- Building an emergency fund
- Covering a condo special assessment
Consolidating debt can lower your total monthly payments. It also turns unsecured debt into debt secured by your home, and it can stretch that debt over as long as 30 years. We show you the full picture, total interest included, before you decide.
What to watch
Your new rate applies to the entire balance, not just the cash you take out. If your current rate is low, keeping your first mortgage and adding a second one may cost less for the same amount of cash. We will tell you honestly when a refinance is not the best tool.
Cash-out loans are generally priced a bit higher than rate-and-term refinances. Lenders also generally want your current loan to have some history first, commonly 6 to 12 months depending on the program.
Our process
A 30-minute call to understand what the cash is for and what you want your payment to look like. Two to three hours comparing structures and lenders. A 30- to 45-minute presentation with every option side by side. Then a dedicated processor coordinates the appraisal and keeps you updated through closing.
See how long it takes to recover your costs with our refinance break-even calculator, or request a quote.
Questions we hear
How much cash can I take out?
For a conventional cash-out refinance on a primary residence, generally up to 80% of your home’s appraised value, minus what you owe and your closing costs. Limits are often lower for second homes, investment properties, multi-unit homes and larger loans.
How long do I need to own my home before a cash-out refinance?
It depends on the program. Conventional loans generally require your existing mortgage to be at least 12 months old, and FHA generally requires 12 months of ownership and occupancy. Exceptions exist, so ask us about your situation.
Is the cash I receive taxable?
Cash from a refinance is loan proceeds, so it is generally not treated as income. Whether the interest is deductible can depend on how you use the money. Please talk with a tax professional about your specific situation.
Should I do a cash-out refinance or a home equity loan?
If your current rate is well below today’s market, a second mortgage such as a home equity loan or HELOC may cost less because it leaves your first mortgage untouched. If your current rate is similar or higher, a cash-out refinance may be simpler. We can run both scenarios.
Can I do a cash-out refinance on a rental property?
Yes. Conventional loans generally allow cash-out on investment properties, typically at lower maximum loan-to-value ratios than on a primary residence. Reserve requirements are also generally higher.
Related programs
Thirty minutes. Your goals. Real options.
Start with a goal consultation. No credit pull, no obligation. We come back with the strongest structures on the market for your situation.