The Quick Read: Usually less than you would get on your main home, because the lender lets you borrow a smaller share of a second home’s value. The cash you receive is the new loan, minus the mortgage and any other liens it pays off, minus closing costs you finance. On a one-unit second home, the cap on that new loan is 75% of appraised value.
What Decides Your Cash?
Your cash is a subtraction problem. Start with the appraised value, apply the maximum loan-to-value ratio, and take away everything the new loan has to pay off.
Here is the formula in plain steps:
1. Appraised value times the maximum loan-to-value gives the largest new loan.
2. Subtract the balance on your current first mortgage.
3. Subtract any other liens that must be paid, such as a home equity line.
4. Subtract closing costs and prepaid items you choose to roll into the loan.
5. What remains is your cash.
Two things trip people up. The appraisal sets the value, not what you paid or what a listing site shows. And the cap is a ceiling, not a promise. Income, credit, and debt load can pull the real number below it.
Most lenders treat a second home as slightly riskier than a main home. People tend to stop paying on a vacation property before they stop paying on the house they live in. So the cap sits lower, and you keep more equity in the property.
Second Home vs. Main Home: The Same Property, Two Caps
Across the wholesale programs Lendmire works with, a conventional cash-out refinance reaches 80% of value on a one-unit principal residence. It reaches 75% on a second home. The Fannie Mae Eligibility Matrix shows the same split for a one-unit second home.
| Factor | Main home | Second home |
|---|---|---|
| Max cash-out LTV | 80% | 75% |
| Equity you must keep | 20% | 25% |
| Unit count | 1 unit (higher caps vary) | 1 unit |
| Occupancy | You live there | Personal use, part of the year |
Five points of value sounds small. On a home worth a lot, it is real money. Take a modeled home that appraises at 100 units of value, with a mortgage balance of 50% of that value:
- Main home ceiling: 80% of value, so up to 30% of value before costs.
- Second home ceiling: 75% of value, so up to 25% of value before costs.
- Gap: five points of value, before any other liens or closing costs come out.
These are modeled assumptions, not a quote. Your payoff balance and costs will change the result.
A second home cash-out also differs from a “limited” refinance on the same property. A limited cash-out refinance only pays off your current loan and costs, with a small amount back to you. It allows more leverage than a cash-out because it does not pull equity out. If you want real cash, you are in the cash-out lane and the lower cap applies. Lendmire’s cash-out refinance programs page lays out how the lanes differ.
What Counts as a Second Home?
The label matters because it sets your cap. A second home is generally a one-unit property you use personally for part of the year. It has to be suitable for year-round use, and you must control how it is occupied. A timeshare or a unit in a rental pool does not qualify. A property managed by a company that controls who stays there does not qualify either.
Fannie Mae sorts every property into three occupancy types: principal residence, second home, and investment property. A property that is mostly rented drifts toward the investment label, and that carries a lower cap again. If you rent the place out here and there, rental income generally cannot be used to qualify you for the loan. Misstating how you use the home is a serious problem on a mortgage file. Tell the loan officer the truth about the plan.
One sentence on the rental question, since people ask: if the property is a pure rental, occupancy decides the leverage, and the investment-property cap is lower than the second-home cap.
Who Can Actually Do This? Rules Beyond Equity
Having equity is only the first gate. These rules can shrink your cash or block the loan.
Seasoning on the loan you are paying off. The first mortgage being refinanced must generally be at least 12 months old, counted from note date to note date. Fannie Mae states this in Selling Guide B2-1.3-03. Freddie Mac’s Guide section 4301.5 uses the same 12-month test.
Time on title. At least one borrower has generally been on the deed for six months. There are exceptions, such as inheritance and property awarded by a court. The delayed financing exception covers a home you bought with cash. It lets you refinance without the six-month wait, but the loan is still priced and capped as a cash-out.
Credit and debt load. Automated underwriting looks at your credit, your debts, and your reserves. Higher debt-to-income ratios can trigger a requirement to hold extra months of reserves. Equity may say yes while your income says less.
Listed homes. A property for sale must be off the market by the time the loan funds.
Property type. Co-op share loans on a second home are not allowed for cash-out. Manufactured homes often face lower limits. Second homes are limited to one unit.
Government loans do not apply. FHA lending is for principal residences, per the HUD handbook. The FHA Streamline and the VA IRRRL are for existing government loans and do not hand you cash from a second home. Both are rate-and-term tools, not equity tools.
Texas has its own cash-out rules written into its constitution. If your home is there, see Lendmire’s piece How Much a Texas Homestead Cash-Out Refinance Funds for a Second Home. Everything above is subject to lender guidelines and full file review.
Three Scenarios, No Dollar Figures
Strong equity. Say you owe about 40% of the appraised value and have no other liens. The 75% ceiling leaves room of roughly 35% of value before costs. After financed costs, you keep most of that. This borrower is the one the formula flatters.
Thin equity. Say you owe about 72% of value. The ceiling leaves only 3% of value, and closing costs can eat most or all of it. At that point the refinance may not make sense. A smaller, cheaper path, like a home equity line, may fit better.
Low appraisal. Say you expected a value, but the appraisal comes in 5% lower. The cap shrinks by exactly 5%, because it is a percentage of the lower value. In the strong-equity case above, the 35% cushion drops to roughly 31% of the original value. The cushion falls by a larger share than the appraisal did, about 11%, because the loan balance did not change. Appraisal risk hits cash harder than people expect.
Does Rolling in Closing Costs Cut Your Cash?
Yes. Closing costs are upfront settlement costs, and you can pay them out of pocket or roll them into the new loan. Rolled-in costs reduce your net cash and raise the loan balance. The exact figure depends on the lender and the loan.
The CFPB’s Loan Estimate guide explains where to look. The Estimated Cash to Close section shows what you owe at closing. Compare your Loan Estimate to your Closing Disclosure before you sign, and expect the final number to differ from the first estimate.
Is the Maximum the Right Amount to Take?
Not automatically. A cash-out refinance replaces your first mortgage with a bigger one. Three effects follow:
- The balance grows. The payment usually rises, even if the new loan has a lower rate.
- You give up your old loan. If your current mortgage has terms you like, you lose them. A home equity loan or line leaves the first mortgage in place.
- The debt is secured by the home. Miss payments and the property is at risk.
A quick decision frame:
| Option | Keeps current first mortgage? | Fits when |
|---|---|---|
| Cash-out refinance | No | Your current loan terms are not worth keeping |
| Home equity loan or line | Yes | You need a smaller amount of cash |
| Rate-and-term refinance | No (replaced) | You want better terms, not cash |
Take what the project needs, not what the formula allows. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Cash From Your Main Home to Buy a Second Home
This is a different question, and search results blur it. If you refinance your primary residence to fund a second home, the collateral is your main home. The 80% primary-residence cap applies, not the second-home cap. Lendmire’s piece How Much Second Home Down Payment a Cash-Out Refinance Funds walks through that route.
Key Terms Defined
Loan-to-value (LTV): The new loan balance divided by the appraised value, shown as a percentage.
Cash-out refinance: A new mortgage larger than the one it replaces, with the difference paid to you.
Limited cash-out refinance: A refinance that pays off your current loan and costs, with only incidental cash to you.
Seasoning: The minimum age of your current loan or time on title before you can refinance.
Reserves: Savings the lender requires you to hold after closing, counted in months of housing payments.
Delayed financing: An exception that lets a cash buyer take out a cash-out loan without waiting six months.
Steps to Get an Accurate Number
1. Gather your current mortgage statement, plus statements for any other liens on the property.
2. Pull your deed or settlement statement to confirm how long you have owned it.
3. Decide honestly how you will use the home, since that sets the occupancy type.
4. Estimate value, then run the formula above at the 75% cap.
5. Ask your loan officer whether an appraisal is required. They will tell you.
6. Request a Loan Estimate and read the Estimated Cash to Close.
The final figure changes between estimate and closing. Appraised value, payoff balances, and costs all move. Plan around a range.
Frequently Asked Questions
What is the maximum LTV on a second home cash-out refinance?
On a conventional one-unit second home, the cap is 75% of appraised value. That means you keep 25% equity in the property. A main home allows 80%. Individual lenders can set tighter limits, so confirm against the lender’s guidelines.
Can I do a cash-out refinance on a second home with an FHA or VA loan?
No. FHA lending is for principal residences. The VA IRRRL is for an existing VA loan and does not provide cash. Government streamlines are not second-home cash-out tools. See va.gov for VA program details.
How long must I own the second home before I can cash out?
Generally at least one borrower has been on title for six months. The loan being paid off must usually be at least 12 months old. Exceptions exist for delayed financing, inheritance, and legal awards, each with conditions.
Does renting the home out change my cash-out amount?
It can. Rental income generally cannot be used to qualify on a second home. If the property is mostly rented, it may be classed as an investment property, which has a lower cap. Be accurate about your use.
Will I receive the full 75% of my home’s value?
No. The 75% is the largest new loan, not your cash. You subtract your existing mortgage, other liens, and financed costs first. What remains is your cash.
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. Program figures are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
For your own numbers, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s refinance programs page.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging FHA, VA, conventional and jumbo purchase and refinance loans through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Eligibility Matrix
2. Fannie Mae Selling Guide B2-1.1-01
3. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
4. Freddie Mac Guide Section 4301.5
5. HUD Handbook 4155.1, Chapter 4, Section B
6. CFPB Loan Estimate Explainer
This article is part of Lendmire’s Refinance series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: How a Lender Counts Reserves on a Second Home Cash-Out Refinance · How Much Equity a Vacation Home Cash-Out Refinance Releases at the Cap · Cash-Out Refinance Rescission Rules for a Second Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.