The Quick Read: Yes. A conventional cash-out refinance is available in states with expensive closings, because eligibility turns on the borrower, the home, how it is used and the loan-to-value ratio, not on what closing costs in that state are. State closing costs change what you pay and how much cash lands in your hand. Texas is the one major state where state law changes the loan itself.
Cash-out refinance estimate
The starting figures are an example value with a balance and a cash request in proportion. Replace them with yours.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the agency cap on a one-unit principal residence, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a cash-out refinance quote; a cash-out loan is priced by the lender at lock. The cash available is the loan the program cap allows less the balances paid off, before closing costs, which are not included. The HELOC line is the program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages.
What Does “High-Cost” Actually Mean Here?
It means two different things, and neither one blocks a conventional cash-out. One is a state with heavy closing charges, such as transfer or recording taxes. The other is a county with a higher conforming loan limit. The first is a cost question. The second raises the loan ceiling.
| Meaning | What it affects | Does it bar cash-out? |
|---|---|---|
| Fee-heavy state | Closing costs and cash to you | No |
| High-cost county | Size of the conforming loan limit | No, the limit goes up |
| State homestead law | Loan structure and documents | No, but it changes the product |
On loan size, the Federal Housing Finance Agency sets a baseline conforming limit and lets local limits rise where home values are high, capped at 50% above the baseline. A high-cost county gets more room, not less.
How a Conventional Cash-Out Works
A cash-out refinance pays off your current first mortgage with a new, larger one and hands you the difference. Per the Fannie Mae Selling Guide, you can use the proceeds to pay off the old loan, finance closing costs and prepaids, clear subordinate liens, or take equity out for any purpose.
Across the wholesale programs Lendmire places files with, the core limits are consistent:
- One-unit principal residence: up to 80% LTV.
- Two- to four-unit principal residence, second home or investment property: up to 75% LTV.
- Credit and ratios: wholesale conventional programs start at a 620 decision score, with a 50% total ratio ceiling on the automated finding.
- Seasoning: the loan being paid off must be at least 12 months old, and the borrower must have been on title for 6 months. Delayed financing, inheritance and legal-award exceptions exist. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The Fannie Mae Eligibility Matrix publishes the same 80% and 75% caps. Everything here is subject to lender guidelines and full file review. It is not a commitment to lend.
Lendmire’s cash-out refinance programs follow these same limits. Lendmire is a mortgage broker, so it arranges the loan through wholesale lenders and does not lend.
Why Some States Cost More to Close
Closing costs vary because state and local governments set some of them. Recording fees are government charges to record your documents. Transfer taxes are state and local fees, often based on the loan amount or sale price. Title rules, attorney requirements and local taxes add to the gap.
None of that is an eligibility test. It sits in the cost sections of your Loan Estimate and Closing Disclosure, under taxes and other government fees. A bigger cash-out can raise any charge that is based on loan amount.
Which charges hit a refinance and which only hit a purchase depends on the state. Some transfer taxes apply only when ownership changes. Ask for a written fee breakdown before you pick a loan amount.
What Happens to Your Cash in a Fee-Heavy State?
Your net cash shrinks, because costs compete with cash for the same equity room. Say you own a home worth a round number and the 80% cap sets the ceiling on the new loan. Every cost you roll into the loan uses part of that room. What is left after the payoff, fees, prepaids and lien payoffs is your cash.
Run it two ways in plain terms:
1. Typical-cost state. Costs are modest, so a small share of your equity room goes to fees and most of it reaches you.
2. Fee-heavy state. Costs are larger, so more of the same room goes to fees. The cash drops, or you pay costs at the table to protect it.
Rolling costs in raises the balance and the LTV. That can push the loan against the cap and trim the cash. Paying costs out of pocket keeps the cash intact but needs money at closing. Neither route is wrong. It depends on how much cash you need.
Cash-out loans also carry loan-level price adjustments that vary by credit score and LTV. They generally cost more than limited cash-out ones. The matrix changes, so ask for current figures on your own file.
The Texas Exception
Texas is the one clear state-law carve-out. A cash-out on a Texas homestead falls under Section 50(a)(6) of the state constitution. Fannie Mae’s guide says Texas law decides whether a loan counts as a 50(a)(6) loan, and the rules add steps:
- The first payment must be due no later than two months after closing.
- The fair-market-value acknowledgment must be based on an attached appraisal.
- Eligible products are fully amortizing first liens: fixed-rate, and 5-, 7- and 10-year ARMs.
- Special documents and title endorsements apply.
Here is the catch. The automated underwriting system does not check 50(a)(6) rules, so an “Eligible” finding does not prove the loan complies. The lender has to verify it. Compliance failures can cost a lender the right to collect principal or interest, or its first-lien status. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
For a Texas-specific walkthrough, see Lendmire’s piece How to Get a Conventional Cash-Out in a High-Cost Closing State Like Texas.
When Cash-Out Pushes You Past the County Limit
A cash-out larger than your county’s conforming limit is no longer a conforming loan. It moves into jumbo territory, where investors set their own rules. Higher limits in expensive counties help you stay conforming, but the equity test still applies. The limit sets how big the loan can be. The LTV cap sets how much equity you can pull. Both have to pass.
Say your county has a high limit but your home’s value only supports 80% LTV. The limit isn’t your constraint. The equity is. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Programs That Don’t Allow Cash-Out
Some programs are a poor fit for equity access. HomeReady and Home Possible are purchase and limited cash-out products. RefiNow is limited cash-out only, per the Fannie Mae matrix, and Community Seconds are not allowed with cash-out. If you want cash, you need the standard cash-out product.
A limited cash-out (rate-and-term) refinance pays off the existing first mortgage, the closing costs and a purchase-money second lien. Only incidental cash comes back. If your goal is a real equity draw, that product won’t deliver it.
Key Terms Defined
Cash-out refinance: A new first mortgage that pays off the old one and gives you the extra equity as cash.
Loan-to-value (LTV): The loan balance divided by the home’s appraised value.
Seasoning: The minimum time you must have owned the home or held the loan being paid off.
Loan-level price adjustment: A pricing add-on tied to credit score, LTV and loan purpose.
Section 50(a)(6): The Texas constitutional rule that governs cash-out loans on a homestead.
A Three-Step Check for Your Situation
1. Check the equity. Compare your estimated value to your payoff. At 80% for a one-unit home you live in, how much room is left after costs?
2. Check the clocks. Is your current loan at least 12 months old, and have you been on title for 6 months? If not, look at the exceptions.
3. Check your state and county. Are you in Texas? Does the new balance stay under your county limit? Then ask for a written fee breakdown.
Cash-out on a second home or investment property comes down to occupancy: leverage is capped at 75% instead of 80%. That is the only point to note here.
Frequently Asked Questions
Is a conventional cash-out available in my state?
Almost certainly, yes. Texas homestead loans add constitutional requirements, and individual lenders may add their own overlays. Lendmire’s consumer lending is licensed in 16 states, so ask a broker whether your state is covered.
Does a high-cost county raise my cash-out limit?
It raises the maximum loan size you can have and still be conforming. It does not raise the 80% LTV cap on a one-unit home you live in. Your equity, not the county limit, usually decides how much cash you can take.
Do closing costs come out of my cash?
Closing costs can come out of your cash. If you roll them into the new loan, they use up equity room and reduce your cash. If you pay at the table, your cash stays intact but you bring money to closing. Your Loan Estimate shows cash to close.
Are refinance closing costs lower than purchase costs?
Sometimes, depending on the state. Certain transfer taxes apply only when ownership changes. Recording fees usually apply either way. A cash-out can also raise charges based on loan amount.
What if my new balance exceeds the county limit?
The loan is no longer conforming. It would move to a jumbo program with its own credit, leverage and documentation rules, so the conventional cash-out terms above would not apply.
Can I deduct anything from a cash-out refinance?
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. For related reading, see Lendmire’s piece Can You Refinance a VA Cash-Out Later in a High-Cost Closing State?.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and home buyers in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the program’s current guidelines, see conventional loan programs.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. FHFA 2026 Conforming Loan Limit Addendum
2. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
3. Fannie Mae Eligibility Matrix
4. Fannie Mae Eligibility Matrix (media copy)
This article is part of Lendmire’s Conventional Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Can a Trust Home Get a Conventional Cash-Out in a High-Cost Closing State? · 6 Myths About the Cost of a Conventional Cash-Out Refinance · Conventional Cash-Out State Rules for Homestead and Spouse Signatures
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.