The Quick Read: The two programs measure the waiting period differently, so neither is “shorter” in every case. A VA cash-out on a VA loan waits on both a date and a payment count for the loan being paid off: the later of 210 days from the first payment due date and the sixth monthly payment. A conventional cash-out waits on the age of the loan being paid off, counted from note date to note date. For an eligible veteran living in the home, the VA route usually reaches more equity. Conventional is for the borrower who has no VA entitlement or who needs a different structure. Everything here is subject to lender guidelines and full file review.
Who Each Option Is Really For
A VA cash-out refinance is for a veteran, service member or eligible surviving spouse who lives in the home and holds a Certificate of Eligibility (COE). A conventional cash-out is for any owner-occupant who meets the credit, equity and loan-age rules, VA-eligible or not.
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: 7.18% as of November 5, 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.
The honest split looks like this:
- VA-eligible, wants the most equity: VA is usually the stronger fit. It can reach 100% of the appraised value, including the financed funding fee, and carries no mortgage insurance.
- Not VA-eligible: Conventional is the only one of the two on the table.
- Inside the seasoning window: The right answer depends on which clock is running, not on which program sounds better.
Lendmire is a mortgage broker. It arranges these loans through wholesale lenders and does not lend. For the program basics, see Lendmire’s VA cash-out refinance program page.
What Seasoning Means and Why It Exists
Seasoning is the age of the loan you are refinancing. Lenders and investors use it to keep borrowers from stripping equity out of a loan that has barely started.
VA Circular 26-19-22 defines it that way and says that if the loan being refinanced is not seasoned by the title-recording date, VA cannot guarantee the new loan. The circular is titled around IRRRLs, but its guidance applies to all VA refinance loans, cash-outs included.
For VA, the test has two parts. The first is a date: 210 days must have passed since the first payment due date. The second is a count: six monthly payments must have been made. The loan must satisfy whichever of the two comes later. Confirm the exact wording with your loan officer against the circular.
Conventional is simpler on paper. The Fannie Mae Selling Guide says that if an existing first mortgage is paid off, it must be at least 12 months old, measured from the existing loan’s note date to the new loan’s note date. A separate ownership rule applies in addition to that. Check the Selling Guide page or your lender for the ownership period.
Side-by-Side
| Factor | VA Cash-Out | Conventional Cash-Out |
|---|---|---|
| Who qualifies | Eligible veteran with a COE | Any qualifying owner-occupant |
| Maximum leverage | Up to 100% of appraised value | Lower; set by lender and investor |
| Mortgage insurance | None | Often depends on equity left |
| Credit floor | VA sets none; wholesale floor starts at 580 | Higher floor on most files |
| Occupancy | You must live in the home | Owner-occupied, second home, or investment each treated differently |
| Waiting clock | Payment history on a VA loan being paid off | Note-date age of the loan being paid off |
| One-time fee | VA funding fee (waived if exempt) | None of that type |
| Key test | Residual income, net tangible benefit | Debt-to-income, equity |
The 100% figure is a VA ceiling. Individual lenders sometimes set lower caps. In the wholesale programs Lendmire places VA files with, the cash-out reaches 100% of the appraised value, with the financed fee counted in.
How the Two Clocks Run
The clocks do not measure the same thing, and that is where files go wrong.
VA-to-VA. The seasoning certification is required for VA-to-VA refinances, per VA’s Cash-Out Refinance User Guide. The clock tracks payments made. A missed or late payment can move your date.
Non-VA payoff into VA. The guide treats this as a separate path. It still requires at least one net tangible benefit, but the seasoning certification is described as a VA-to-VA item. Lender overlays may still add their own waiting rules. Those are investor rules, not VA rules.
Conventional. The clock is the age of the note being paid off. A prior rate-and-term refinance creates a new note, so that new note must reach 12 months before a conventional cash-out can pay it off.
A recent cash purchase. Conventional has a delayed financing exception. All other cash-out requirements still apply, and cash-out pricing applies. VA has no direct equivalent in the sources reviewed.
Here is how the dates play out for three hypothetical borrowers:
1. A veteran with a VA purchase loan, closed recently. The first payment date and the payment count both have to be satisfied. If the loan is not seasoned by the title-recording date, VA cannot guarantee the new loan.
2. A veteran whose current loan is conventional. The VA seasoning certification does not apply to this payoff. The lender may still set its own minimum, so ask before assuming.
3. A borrower who refinanced into a new conventional loan recently. The new note starts the 12-month clock over for a conventional cash-out.
When the VA Cash-Out Is the Better Fit
VA wins when the borrower is eligible, lives in the home and wants maximum equity access. The reasons are mechanical:
- Leverage. Up to 100% of the appraised value, including the financed funding fee.
- No mortgage insurance. Conventional loans at higher leverage typically carry it.
- Any loan type can be paid off. A cash-out can refinance a non-VA loan into a VA loan.
- Flexible qualifying. Residual income is the controlling test. The 41% debt-to-income figure is a guideline, not a cap. A ratio above it needs residual income well above the table.
- Credit. VA sets no minimum score. The wholesale programs Lendmire works with start at a 580 decision score.
The costs are real too. The funding fee on a cash-out refinance is 2.15% for first use and 3.3% for later use, and it is waived for veterans receiving service-connected disability compensation and the other exempt groups. It can be financed. The net tangible benefit test also applies: the loan must meet one of VA’s eight listed benefits. The half-percent rate-reduction and fee-recoupment tests are IRRRL rules and do not apply to the VA cash-out.
For a deeper look at how Type 1 and Type 2 cash-outs differ, see Lendmire’s piece VA Cash-Out Refinance vs. Conventional Cash-Out Under VA Type 1 and Type 2 Refinance Rules.
When the Conventional Cash-Out Is the Better Fit
Conventional is the better fit in these cases:
- No VA entitlement. The simplest reason. There is nothing to compare.
- Entitlement is tied up. A borrower with limited remaining entitlement may find the VA path needs a down payment. Speak with a loan officer about your own entitlement.
- The VA clock is the problem. If a VA-to-VA payoff is not yet seasoned and the note on a conventional loan has already passed 12 months, conventional may be open first.
- A recent cash purchase. The delayed financing exception exists on the conventional side.
- Different occupancy. VA cash-out requires you to occupy the home. Conventional treats second homes and investment properties differently, and leverage there depends on occupancy.
Conventional costs more in leverage terms. Lenders cap leverage lower than VA, and mortgage insurance often enters the picture when equity left in the home is thin. Check how much equity the lender requires you to keep. The CFPB’s home equity guide notes that lenders typically require you to keep some equity, across a range of products.
Mistakes That Derail These Files
- Assuming six payments is enough for VA. Both the date test and the payment test apply.
- Applying VA seasoning to every VA cash-out. The certification attaches to VA-to-VA files.
- Assuming conventional has no waiting period. The 12-month note-age rule is real.
- Assuming a prior refinance does not matter. It creates a new note and restarts a conventional clock.
- Treating overlays as VA rules. A lender can be stricter than VA. Ask which rule is VA’s and which is the lender’s.
- Skipping the cost of a larger balance. The CFPB notes a cash-out can lengthen payoff time, and the payment may rise because the loan is larger.
Cash-out is not free money. The CFPB found that credit scores jumped in the quarter after a cash-out and credit card balances trended back toward earlier levels over the next year. Plan what the cash is for before you apply.
Key Terms Defined
- Seasoning: The age of the loan being refinanced, measured by the rules of the program.
- Note date: The date the borrower signed the loan’s promissory note. Conventional loan age counts from this date.
- Certificate of Eligibility (COE): The VA document proving you qualify for a VA loan.
- Net tangible benefit: A test that the refinance gives the veteran a real, defined advantage.
- Residual income: What is left of monthly income after taxes, debts and living costs. It is the controlling VA test.
- Delayed financing: A conventional exception for borrowers who paid cash for a home and want to borrow against it soon after.
Frequently Asked Questions
Does VA seasoning apply if my current loan is conventional?
Generally no. VA’s user guide ties the seasoning certification to VA-to-VA refinances. The lender may still apply its own waiting rule, so ask before you plan around a date.
How long does a conventional cash-out make me wait?
If an existing first mortgage is paid off, it must be at least 12 months old, counted from note date to note date. A separate ownership rule applies on top of it. Your lender can tell you the exact ownership period.
Can I cash out right after buying a home?
Not usually with a financed purchase. Conventional offers a delayed financing exception for recent cash purchases, with cash-out pricing and the other requirements still in force.
Does a prior refinance restart the clock?
Yes on the conventional side, because a refinance creates a new note that must reach 12 months. On the VA side, the loan being paid off must be seasoned by the title-recording date.
Is the interest on a cash-out deductible?
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Where This Leaves You
Count the days and payments on your own loan before you pick a program. If you are VA-eligible and live in the home, the VA cash-out usually reaches more equity without mortgage insurance, with a funding fee unless you are exempt. If you are not, or the VA clock is the obstacle, conventional is the fallback once the note is old enough. Both are subject to lender guidelines and a full file review, and neither is a commitment to lend.
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 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.
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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
2. Fannie Mae Selling Guide B2-1.3-03
3. VA Cash-Out Refinance User Guide
4. CFPB Using Home Equity Guide
5. CFPB: CFPB Report Finds Cash Out Mortgage Refinance Borrowers Improve Credit Scores
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: Can You Remove a Co-Borrower With a VA Cash-Out Refinance? · VA Cash-Out Refinance Requirements When Equity Is Tight · VA Cash-Out Refinance Requirements Within the Seasoning Period
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.