The Quick Read: The best fit for most borrowers is a standard conventional cash-out refinance on your own home, which carries no private mortgage insurance (PMI) on the new loan. The reason is the leverage cap, not a special program: the new loan stays at or below 80% of the home’s value, and insurance only kicks in above that line. The tradeoff is that you can pull out less cash. A wholesale lane that reaches 89.99% with no mortgage insurance exists for a narrow set of borrowers, and the best program for your situation depends on your credit, your equity, and your occupancy.
Why “No-PMI Program” Is the Wrong Search
No program is best for everyone. And on a conventional cash-out, there is usually no special no-PMI product to hunt for.
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: 7.18% as of November 5, 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.
Here is how it works. Private mortgage insurance is a policy that protects the lender when you borrow a large share of the home’s value. It is required above 80% loan-to-value (LTV), which is the new loan divided by the appraised value. Fannie Mae’s rules say a loan must be at or under 80% LTV, or carry insurance on the portion above 80%, per the Fannie Mae Selling Guide. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
A conventional cash-out refinance on a one-unit primary home is capped at 80% LTV. Freddie Mac’s Seller/Servicer Guide shows the same cap. So the loan generally never crosses the line where insurance is required.
Think of it as a side effect of the ceiling. You are not dodging a fee. You are borrowing less.
How a Conventional Cash-Out Is Underwritten, Step by Step
Across the wholesale programs we place files with, the sequence looks the same from file to file. Lendmire is a mortgage broker, so the lenders do the approving. The steps below are what they review. Everything is subject to lender guidelines and full file review, and none of it is a commitment to lend.
1. Classification. A new first mortgage that pays off your existing loan and puts cash in your hand is a cash-out refinance. A refinance that only pays off the old loan and costs is a different product, covered below.
2. Appraisal. The appraised value is the bottom of the fraction. Everything else is measured against it.
3. Payoff and liens. Your current first mortgage gets paid off. Any second lien or home equity line you leave open counts toward the cap too.
4. Seasoning. Seasoning is the waiting period before you can refinance. The first mortgage being paid off must be at least 12 months old, counted note date to note date. At least one borrower must also have been on title for 6 months.
5. Underwriting. The lender checks your credit score, your debt-to-income ratio (your monthly debts divided by your monthly income), and your reserves. Most conventional files are run through automated underwriting, which issues a findings report on the loan. The wholesale programs start at a 620 decision score, with a total ratio ceiling of 50% on automated files.
6. Pricing. Cash-out loans carry a price adjustment based on LTV and credit score. Fannie Mae’s cash-out guidance describes it. It is a pricing add-on, not mortgage insurance. Higher leverage and lower scores generally cost more.
7. Closing and the cooling-off window. On a refinance of your home, you get a three-business-day right to cancel before the cash is released. The Consumer Financial Protection Bureau explains that waiving it is allowed only for a genuine financial emergency.
The Cash-Out Ceilings by Occupancy
Occupancy decides how much leverage you get. Here is the conventional cash-out picture from the verified program parameters.
| Property | Max LTV on cash-out |
|---|---|
| One-unit primary residence | 80% |
| Two- to four-unit primary residence | 75% |
| Second home | 75% |
| Investment property | 75% |
This piece is about the home you live in.
Now the point most people miss: the cap applies to the whole new loan, not to your equity. If your home is worth a given amount and you owe a modest balance, 80% of the value is the total loan, including the old balance being paid off. The cash you receive is what is left over after the payoff and costs. People hear “80%” and think they can borrow 80% of their equity. They cannot.
Where Does the 89.99% No-Mortgage-Insurance Lane Fit?
It is a narrow wholesale lane that goes above the 80% cap without monthly mortgage insurance. The lane reaches 89.99% LTV on a thirty-year fixed loan on a primary residence with a conforming balance. It requires a 680 score and a 50% ratio, and it has its own six months of seasoning. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Why is there no insurance line? Because the structure is different from borrower-paid PMI. Someone still carries the extra risk, and that cost does not vanish. It tends to show up in pricing. You would compare the Loan Estimate for this lane against a standard 80% cash-out and look at the full cost, not just the missing insurance line. Every figure here varies by lender and program, and guidelines, property type, leverage, and credit profile all apply.
Some limits to know:
- It is not written in every state. In Texas, a cash-out on the homestead is capped by the state constitution at 80% of the home’s value, so this lane is not written there.
- It is limited to primary residences, fixed rates, and conforming balances.
- Whether you fit depends on lender guidelines, the appraisal, and your full file.
Is it the best choice? That depends on how much cash you need. If you need the extra equity, it can beat taking on monthly insurance. If you need less cash, the standard 80% cash-out is simpler and usually cleaner.
Rate-and-Term Is Not a Cash-Out (and It Can Carry PMI)
A rate-and-term refinance, also called limited cash-out, only replaces your existing loan. It pays off the first mortgage, the closing costs, and any purchase-money second lien. You get only incidental cash back.
Leverage can run much higher. A one-unit primary residence can reach 95% LTV, or 97% when the existing loan is agency-owned and the first-time-buyer program allows. Fannie Mae’s limited cash-out guidance notes that the high-LTV version requires the existing loan to be Fannie Mae-owned.
Mortgage insurance applies above 80% on these loans. So the no-PMI question flips. A rate-and-term at high leverage can carry PMI, while a true cash-out at 80% does not. That surprises people. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
What About VA and FHA?
Both are government-backed, and both handle insurance differently. Neither is a no-cost route.
- VA cash-out has no monthly mortgage insurance, but charges a one-time funding fee. It is open only to eligible veterans and service members.
- FHA cash-out carries FHA mortgage insurance. For a borrower whose goal is no insurance on the new loan, it is usually the weakest fit.
For existing government loans, the streamlines work differently. The FHA Streamline needs no appraisal and limited credit review, but requires a net tangible benefit. The VA IRRRL carries a 0.5% funding fee unless exempt, with no VA appraisal and seasoning of the later of 210 days and 6 payments. Neither pays you cash. Lendmire’s piece on the VA cash-out refinance program without mortgage insurance goes deeper on the veteran route.
Here is the side-by-side.
| Route | Mortgage insurance on new loan | What replaces it |
|---|---|---|
| Conventional cash-out, 80% | None, from the cap | Pricing adjustment |
| Wholesale 89.99% lane | No monthly | Pricing structure |
| VA cash-out | No monthly | One-time funding fee |
| FHA cash-out | Yes | FHA premiums |
Lendmire’s cash-out refinance programs page lays out how these conventional options work in more detail.
Where the General Rule Breaks
Several situations bend the rule. These are the edge cases we see most.
You want more than 80%. A standard conventional cash-out generally is not available. The 89.99% lane may be, if you fit it. Otherwise you lower the cash amount or wait for more equity.
You paid cash for the home. Delayed financing is a named exception to the title-seasoning wait. The lender needs documentation that the purchase had no financing against the property, and that your funds are sourced. Details live in the Freddie Mac guide, and each lender applies them to your file.
You inherited the home or received it through a legal award. Both are exceptions to the seasoning wait.
You are buying out a co-owner. A special-purpose cash-out, such as a co-owner buyout, can be exempt from the 12-month first-lien seasoning rule. Paying off a first-lien home equity line is another named exception.
You have a student-loan payoff in mind. Fannie Mae waives the cash-out price adjustment for loans that meet its student-loan cash-out requirements. The standard LTV limits still apply.
You already pay PMI. Existing PMI on your current loan does not block a cash-out. The new loan is what must fit the cap. If the new loan is at or under 80%, your old PMI ends when the old loan is paid off.
Your property has features the agencies exclude. Some situations, such as properties listed for sale at disbursement or certain PACE-loan setups, may be ineligible. Lenders confirm this on the file.
You have a recent credit event. Waiting periods are agency rules: four years from a chapter 7 discharge, seven from a foreclosure, and four from a short sale or deed-in-lieu. Documented extenuating circumstances can shorten them.
What Your Decision Looks Like in Practice
Picture a homeowner with a primary residence, a good credit score, and a first mortgage that is well past its first anniversary. She wants cash for a renovation.
She checks three things in order:
1. How much cash do I need? If the cash plus her payoff fits under 80% of appraised value, she is in standard cash-out territory. No PMI on the new loan.
2. If it does not fit, do I fit the 89.99% lane? She needs a 680 score, a 50% ratio ceiling, a thirty-year fixed, a conforming balance, six months of lane seasoning, and a state where it is written.
3. What does the whole package cost? Not just the insurance line. She compares the Loan Estimate for each option: the closing costs, the term, and the balance she will carry.
Now picture a different homeowner with a low existing loan and a smaller need. A cash-out might not make sense at all. Resetting the term and losing a good existing loan can cost more than it saves. For some borrowers, a home equity loan or line of credit is the smarter move because it leaves the first mortgage untouched. Not every need calls for a refinance.
What Lenders Look For
- Appraised value and total payoff balance, including any home equity line
- Occupancy and unit count
- Credit score and any recent credit events
- Seasoning on the old loan and on title
- Debt-to-income ratio and reserves
Have recent pay records, mortgage statements, homeowner’s insurance information, and your home equity line statement ready. A broker who shops multiple wholesale lenders can match your scenario to the program and lender that fits, rather than forcing your file into one lender’s menu. The best fit depends on your property, credit, leverage need, and documentation.
Common Mistakes
- Assuming “80%” means 80% of equity. It is 80% of value, all-in.
- Counting only the monthly insurance line. Compare the whole Loan Estimate.
- Mixing up the two seasoning clocks. On a standard cash-out, the first mortgage being paid off must be at least 12 months old, and a borrower must have been on title for 6 months. The no-mortgage-insurance lane has its own six months of seasoning, so confirm which clock applies to your loan.
- Forgetting an open second lien. It counts toward the cap.
- Assuming PMI cancels itself in every case. Cancellation rules use the original value, and conditions apply. You can request removal at 80% and the servicer must terminate it at 78%, per the Consumer Financial Protection Bureau.
Key Terms Defined
Cash-out refinance: A new first mortgage that pays off your existing loan and gives you the difference in cash.
Private mortgage insurance (PMI): A policy that protects the lender when your loan is above 80% of the home’s value. You pay for it, not the lender.
Loan-to-value (LTV): The new loan amount divided by the appraised value of the home.
Seasoning: The waiting period required before you can refinance a loan or after you take title.
Limited cash-out refinance: A refinance that replaces your loan and costs with only incidental cash back. Also called rate-and-term.
Price adjustment: An add-on to pricing based on factors such as LTV and credit score. It is not mortgage insurance.
Frequently Asked Questions
Does a cash-out refinance require PMI?
Usually not on a conventional one-unit primary home. The 80% cap keeps the new loan below the point where insurance is required. Above 80%, insurance applies to the portion over the line. A wholesale lane reaches 89.99% with no monthly mortgage insurance for borrowers who fit its terms.
Can I get cash out of more than 80% of my home’s value?
Generally not through a standard conventional cash-out. One wholesale lane reaches 89.99% on a thirty-year fixed primary residence with a conforming balance, a 680 score, and a 50% ratio. It has its own six months of seasoning and is not written in Texas.
Will refinancing remove the PMI I pay now?
Yes, if the new loan lands at or under 80% of the appraised value. The new loan replaces the old one, so the old policy ends. If the new loan lands above 80%, new insurance can apply.
How long do I have to own the home before a cash-out?
The first mortgage being paid off must be at least 12 months old, and a borrower must be on title for 6 months. Exceptions exist for delayed financing, inheritance, and legal awards, per Freddie Mac’s Guide and lender review.
Is VA a better way to avoid mortgage insurance?
For an eligible veteran, VA cash-out has no monthly mortgage insurance but charges a one-time funding fee. Whether it beats conventional depends on your leverage need and the full cost.
Next Step
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. Every program figure here is 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.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. 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. Fannie Mae Selling Guide (Charter Act eligibility)
2. Freddie Mac Seller/Servicer Guide 4203.1
3. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
4. Consumer Financial Protection Bureau
5. Fannie Mae Selling Guide B2-1.3-02, Limited Cash-Out Refinance Transactions
6. Consumer Financial Protection Bureau, When can I remove PMI
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Cash-Out Refinance Requirements Without Paying Private Mortgage Insurance on the New Loan · Cash-Out Refinance Options When You Have Private Mortgage Insurance on Your Current Loan · Cash-Out Refinance Requirements to Pay Off Private Mortgage Insurance
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.