Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The Quick Read: A 700 score is not a VA requirement, because VA sets no minimum credit score at all. It sits comfortably in the range most lenders accept, so it is rarely the limiting factor. The VA appraisal, residual income, occupancy, seasoning and the net tangible benefit test decide the file. Approval is never guaranteed and stays subject to lender guidelines and full file review.
VA cash-out estimate
Seeded with an example value, a typical balance, and a round cash request at the first-use fee; change any field.
Editable benchmark: 7.24% as of October 29, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a VA cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the full-value VA cap with the first-use funding fee financed, 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 VA cash-out refinance quote; a VA loan is priced by the lender at lock. The total loan, funding fee included, is capped at the program leverage on the reasonable value; the fee follows the tier chosen. The cash available is what the cap allows less the balances paid off and the fee, before closing costs, which are not included. The HELOC line is the line program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. The debt-to-income figure is a guideline; residual income decides a VA file. Licensed in sixteen states for consumer mortgages.
Does VA Require a Minimum Score for a Cash-Out Refinance?
No. VA’s own Buyer’s Guide says VA does not require a minimum credit score, and that most lenders use the score to help set pricing. The agency also says a lender may set its own limit. That lender limit is called an overlay.
Across the wholesale programs we place VA files with, the decision-score floor starts at 580. A 700 clears that by a wide margin. Some lenders set a higher floor for certain files, such as manual underwrites, so two lenders can give different answers on the same borrower. A 700 is a strong position. It is not a ticket.
Key Terms Defined
Certificate of Eligibility (COE): The VA document that confirms your service qualifies you for the benefit.
Reasonable value: The value the VA appraisal assigns to the home, which caps how much you can borrow.
Residual income: The money left each month after taxes, debts and housing costs, measured against a VA table.
Net tangible benefit (NTB): A measurable improvement the new loan must deliver compared with the old one.
Seasoning: The payment history an existing loan must show before it can be refinanced.
Overlay: A lender rule stricter than VA’s own.
How Is the Loan Underwritten, Step by Step?
Here is the sequence a cash-out file follows.
1. Certificate of Eligibility. It can be pulled through a lender or VA.gov. Eligibility rules are VA’s, not the lender’s.
2. Full underwriting. Cash-out is not a streamlined loan. The lender reviews credit, income, debts and assets. Pay stubs and bank statements are typical documents, though lists vary by lender.
3. Occupancy. VA’s home loan overview says the home must be one you occupy. For active-duty service members, a spouse or dependent can meet that test. A cash-out on a rental property does not fit this program.
4. VA appraisal. It sets the reasonable value. Everything on LTV flows from that number.
5. Loan sizing. The VA cash-out reaches 100% of the appraised value, with the funding fee counted inside that ceiling. Some lenders cap lower as their own policy. That is an overlay, not a VA rule.
6. Net tangible benefit. The new loan must show one of VA’s listed benefits. This is a real test, covered below.
7. Closing disclosures. As a consumer mortgage, the file runs through the Loan Estimate and Closing Disclosure. Read both against your current loan.
What Does Residual Income Do That a 700 Score Can’t?
Residual income is the controlling test on VA files. The 41% debt-to-income figure is a guideline, not a cap. A borrower above it needs residual income well above the VA table. A borrower below it still has to clear the table.
This is where good-credit files get stuck. A 700 borrower with heavy installment debt and a large family can fall short on residual income while a 640 borrower with low debts clears easily. The score tells the lender how you handled credit. Residual income tells the lender whether the budget works after the new loan.
The regulation behind this, 38 CFR Part 36 Subpart B, points lenders to VA’s credit standards, which include residual income. The same part also contains the fee recoupment safe harbor for the IRRRL, which is a different product.
What Is the Net Tangible Benefit Test?
Every VA cash-out has to pass it. VA Circular 26-19-05 implemented the current cash-out rules and states that all cash-out refinancing loans must pass the net tangible benefit test. The borrower must get at least one of VA’s eight listed benefits. Common ones include:
- dropping mortgage insurance from a conventional or FHA loan;
- moving to a shorter term;
- lowering the interest rate;
- converting an adjustable loan to a fixed one.
Here is the catch borrowers miss. The half-percent rate-reduction test and the fee-recoupment test are IRRRL rules. They do not apply to the VA cash-out. Cash-out has its own NTB test, and the lender must also give you a comparison of the old and new loans.
What Seasoning Applies?
Seasoning is the later of 210 days from the first payment and the sixth monthly payment. Circular 26-19-05 defines a seasoned loan this way for refinancing a VA loan. For loans refinanced within a year of closing, the lender must obtain a servicer payment history.
Our wholesale programs carry the same seasoning on a cash-out, so a recent purchase or a recent refinance can block the file until the clock runs. Some borrowers assume a different rule applies to non-VA loans. VA’s own rule is narrower than many lender overlays, so ask the lender which one is driving the answer.
Can a Non-VA Loan Be Refinanced Into a VA Loan?
Yes. VA states that a cash-out refinance can replace a non-VA loan with a VA-backed one. You do not need an existing VA loan. That requirement belongs to the IRRRL, which only refinances a VA loan.
For a homeowner carrying a conventional loan with monthly mortgage insurance, this is the common play. Moving into VA can remove that insurance, and removing it satisfies the net tangible benefit test on its own. VA carries no mortgage insurance of any kind.
How Much Does the Funding Fee Add?
The funding fee is a one-time charge, financeable inside the loan, and waived for veterans receiving compensation for a service-connected disability and other exempt groups. For the cash-out refinance it is 2.15% on first use and 3.3% on subsequent use. The IRRRL fee is 0.5%.
Because the fee counts inside the 100% ceiling, financing it reduces the cash that reaches you. Exemption and refund rules are detailed. VA’s funding fee page is the place to confirm your status.
Cash-Out vs. IRRRL vs. Conventional: Which Fits?
| Factor | VA cash-out | VA IRRRL | Conventional cash-out |
|---|---|---|---|
| Existing loan | Any loan type | VA loan only | Any loan type |
| Appraisal | VA appraisal | None | Lender appraisal |
| Underwriting | Full | Limited | Full |
| Mortgage insurance | None | None | Depends on equity |
| Cash to borrower | Yes | No | Yes |
At a 700 score, a conventional cash-out is a real alternative. The decision comes down to how much equity you want to reach and whether mortgage insurance applies. VA reaches the full appraised value. Conventional programs generally stop short of that. Compare the leverage each one allows against the amount you actually need.
What Can Still Sink a 700-Score File?
Plenty. The score is one input.
- Residual income shortfall. Covered above. It is the most common surprise.
- Recent late payments. A single recent 30-day late on a mortgage can matter more than the score.
- High utilization or collections. Revolving balances and open collections get reviewed even with a 700.
- Seasoning. A loan that is too new blocks the file regardless of credit.
- Appraisal short of expectations. A low reasonable value shrinks the loan. Ask about reconsideration with recent comparable sales.
- Occupancy. The home must be yours to live in.
- Bureau differences. Lenders use a middle score. Your 700 on one app may not be the middle score on the file.
Three Borrower Profiles at the Same Score
Consider three homeowners, each with a 700 score.
The first has moderate debts, a first-use COE and a recent appraisal near expectations. The file reads clean. Residual income clears the table and the lender’s overlay is not a factor.
The second is consolidating credit cards. The cash-out pays them off, which lowers monthly obligations and helps residual income. That can strengthen the file, though it converts unsecured debt into debt secured by the home. Treat that as a real tradeoff.
The third has a high debt-to-income ratio and a growing family. The 41% guideline gets exceeded, so the lender needs residual income well above the table. If it falls short, the 700 does not rescue the file.
Same score. Three different outcomes.
Pre-Application Checklist
- Pull your COE or have the lender pull it.
- Check all three credit reports for errors, collections and high balances.
- Document occupancy and the age and payment history of your current loan.
- Gather pay stubs, bank statements and a debt list.
- Confirm your funding-fee status, including any exemption.
- Decide what the cash is for before you size the loan.
Watch for Misleading Offers
Unsolicited refinance pitches that look official are common. The CFPB, in an enforcement action, found a lender made VA cash-out loans look cheaper than borrowers’ original mortgages by giving misleading cost information. Compare the Loan Estimate against your current loan, including the term, the balance and the funding fee. Be wary of any pitch that leans on skipped payments or repeated refinancing.
Where Does Lendmire’s Program Fit?
Lendmire’s VA cash-out refinance program page lays out how the loan reaches the full appraised value and what the file needs.
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.
Frequently Asked Questions
Is 700 a good credit score for a VA cash-out refinance?
Yes, it sits well above the 580 decision-score floor on the wholesale programs Lendmire places VA loans with. It generally helps with lender overlays and pricing. It does not guarantee approval, because residual income, the appraisal and seasoning also decide the file.
Does VA require a minimum score?
No. VA states it does not require one. Individual lenders may set their own limit, which is why the same borrower can get different answers from different lenders.
Can I borrow 100% of my home’s value?
The VA cash-out reaches 100% of the appraised value, including the financed funding fee. Some lenders cap lower as policy. Lender guidelines and the appraisal set the final amount.
Do I need an existing VA loan?
No. A cash-out can refinance any loan type into VA. If you do have a VA loan, seasoning applies: the later of 210 days from the first payment and the sixth monthly payment.
Does the half-percent rate-reduction rule apply?
No. That test and the fee-recoupment test belong to the IRRRL. The cash-out needs a net tangible benefit from VA’s listed options instead.
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.
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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. VA Home Loan Guaranty Buyer’s Guide
2. VA Home Loans overview (benefits.va.gov)
6. VA Funding Fee and Closing Costs
7. CFPB enforcement action on VA cash-out refinances
This article is part of Lendmire’s VA cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Prepare a VA Cash-Out Refinance File for Approval · Best VA Cash-Out Refinance Program to Refinance an Existing VA Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.