These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
The Quick Read: A 620 score can qualify for a conventional cash-out refinance, but it is only the entry ticket. Underwriters test score, loan-to-value, debt-to-income, reserves, and loan age together. At 620, the equity and the ratios do most of the persuading. Every figure here is subject to lender guidelines and full file review, and nothing is a commitment to lend.
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.
What Is a Cash-Out Refinance, and Why Does 620 Matter?
A cash-out refinance replaces your current first mortgage with a new, larger one. The new loan pays off the old balance and the closing costs. What is left over comes to you as cash. Freddie Mac defines it as a mortgage with no specific restrictions on how the proceeds are used. You can pay off debt, fund a renovation, or cover tuition.
It is not a second mortgage. It is one new loan that replaces the first. That means the new term and new pricing apply to your entire balance, not only the cash you take.
Across the wholesale programs we place files with, conventional loans start at a 620 decision score. That is the score the lender uses after pulling credit from all three bureaus. Lendmire’s cash-out refinance programs page lays out the options. A 620 is the floor, not a promise. Think of it as getting through the door. Whether you reach the cash you want depends on everything else in the file.
How Underwriting Works, Step by Step
An underwriter works through the file in a set order. Here is the sequence on a typical conventional cash-out.
1. Credit pull and score selection. The lender pulls your credit and settles on one representative score. With two borrowers, the score used can drop to the weaker borrower’s. Ask which score will drive pricing before you apply.
2. Eligibility gates. These stop a file no matter how much equity you have. The home must fit the occupancy type, and the loan being paid off must be old enough. More on those clocks below.
3. Income, asset, and employment documents. Lenders must make a good-faith determination that you can repay. The CFPB’s ability-to-repay rule says they must consider and document income, assets, employment, credit history, and monthly expenses. Expect pay stubs, traditional personal-income documentation, bank statements, and your current mortgage statement. Self-employed borrowers add business returns.
4. Appraisal. The appraised value sets the ceiling on the new loan. A low appraisal shrinks the cash or erases it.
5. Automated underwriting. Most conventional files run through the agency’s automated system first. Its finding governs most files. Files that fall outside it go to manual underwriting, which is stricter.
6. Pricing. Score and leverage combine to set the cost of the loan. Cash-out loans carry extra pricing adjustments, and a 620 sits at the expensive end.
7. Net proceeds. The new loan pays the old mortgage first, then costs and prepaids. Whatever remains is your cash.
8. Closing. You get a Loan Estimate and a Closing Disclosure, so you can compare the final terms against what you were quoted.
What the Underwriter Checks at 620
| Check | What they want | What goes wrong at 620 |
|---|---|---|
| Score | Decision score at the program floor | No cushion for a late payment |
| LTV | Within the occupancy cap | Low appraisal cuts the cash |
| DTI | Within the automated finding | High debts push you toward reserves |
| Reserves | Savings after closing | Thin savings can sink the file |
| Loan age | Existing first mortgage seasoned | A recent refinance blocks you |
The Numbers That Decide the File
Leverage. Conventional cash-out tops out at 80% loan-to-value (LTV) on a one-unit primary residence. LTV is the new loan divided by the home’s appraised value. On two- to four-unit primary residences, second homes, and investment property, the cap is 75%. Occupancy sets the leverage. Texas homestead cash-outs, known as Section 50(a)(6) loans, are capped at 80% by the state constitution.
Debt-to-income. DTI is your monthly debts divided by your monthly gross income. Files that receive an automated finding on the wholesale programs can go up to a total ratio ceiling of 50%. A manually underwritten loan is a separate path with a tighter limit of 36% or 45%, and the reserve and score factors from the Eligibility Matrix decide which applies. Federal law does not set a universal cap here. The CFPB lists the 43% idea as fiction: the ability-to-repay rule does not mandate debt-to-income ratios. Limits come from the program.
Reserves. Reserves are savings left after closing, counted in months of payments. Fannie Mae’s Eligibility Matrix requires minimum reserves on cash-out files run through its automated system when DTI exceeds 45%. Older guide wording set that at six months. Confirm the current figure with your loan officer. A borrower with plenty of equity and no savings can still get stopped here.
Seasoning. Seasoning is the waiting period before you can refinance. Two clocks run at once. The first mortgage being paid off must be at least 12 months old, measured note date to note date, per the Fannie Mae Selling Guide. You also generally need to have been on title for six months. People often collapse these into one. They are separate.
Where 620 Gets Costly
Here is the honest part. A 620 file is approvable on paper and expensive in practice. Pricing adjustments stack by score and leverage, so the same equity costs more than it would for a borrower at 700. Lenders may also add their own overlays, which are rules stricter than the agency’s.
That leads to a real decision. A cash-out resets your whole loan. If your existing loan carries terms you like, taking cash out may cost more than the cash is worth. Compare the full picture on the Loan Estimate before you commit, and look at the balance, term, and costs together.
On the agency path, mortgage insurance is required above 80% LTV, except in the wholesale no-mortgage-insurance cash-out lane described next. Because conventional cash-out stops at 80% on a one-unit primary residence, insurance rarely comes into play there. Where it does apply, it cancels at 80% of original value on request and ends automatically at 78%. The exception lane is a separate wholesale option that reaches 89.99% LTV with no mortgage insurance. It needs a 680 score and a 50% ratio on a thirty-year fixed primary residence with a conforming balance, plus its own six months of seasoning. A 620 borrower doesn’t reach that lane. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Two Borrowers, Same Score
Picture two homeowners, both at 620. Both own a one-unit primary residence.
The first has held the home for years and owes well under 60% of its appraised value. Debts are modest and savings cover several months of payments. This file asks little of the score. Even with a higher price, the numbers hold together.
The second refinanced the home last year and owes close to the 80% cap. Debts push the DTI above 45% and savings are thin. This file hits three gates: loan age, reserves, and leverage. A low appraisal would remove the cash entirely.
Same score. Different outcomes. At 620, you borrow against your equity and your ratios, not your credit.
Where the General Rule Breaks
- Delayed financing. A buyer who paid all cash can take cash out within six months of purchase. The source of funds must be documented, and cash-out pricing still applies.
- Free and clear homes. A new first mortgage on a home with no lien still counts as cash-out.
- Title exceptions. Inheritance, legal awards, and some entity-held title can waive the six-month title clock. Freddie Mac’s bulletin lists LLC and LP exceptions.
- Rate-and-term is different. A rate-and-term refinance, also called a limited cash-out, pays off the first mortgage, closing costs, and any purchase-money second lien. Only incidental cash back is allowed, with Fannie Mae capping it at the lesser of 2% of the new loan or $2,000. Freddie Mac uses the greater of 1% of the new loan or $2,000. The limited cash-out reaches 95% LTV on a one-unit primary residence. This is the “no cash” option, and it is where a 620 borrower can often get a better structure.
- FHA and VA. An FHA Streamline and a VA IRRRL refinance an existing government loan with no appraisal. They cannot pull cash out. A true VA cash-out has its own rules, including a 36-month recoupment test on certain fees, per the VA Lenders Handbook. Many lenders set credit floors for government loans above what the programs require.
- Recent credit events. Agency waiting periods apply: 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 to Do Before You Apply
Pull your own credit first and fix errors. Paying a card down before the pull can lift the score and the pricing tier. Get a payoff statement for the current mortgage. Gather two years of income documents and recent bank statements.
Then run the DTI. If it lands above 45%, plan for reserves. A broker can shop the file across wholesale lenders and match it to the program whose overlays fit your profile. The best program for your situation depends on your property, score, leverage, and documentation.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Key Terms Defined
Decision score: The single credit score the lender uses after reviewing all three bureau reports.
LTV (loan-to-value): The loan amount divided by the home’s appraised value.
DTI (debt-to-income): Your monthly debt payments divided by your gross monthly income.
Seasoning: The minimum age of your existing loan, or time on title, before you can refinance.
Overlay: A lender rule stricter than the agency’s own guideline.
Reserves: Savings left after closing, counted in months of mortgage payments.
Frequently Asked Questions
Can I really get a cash-out refinance with a 620 score?
Yes, on conventional programs that start at a 620 decision score, if the rest of the file holds up. Equity, DTI, reserves, and the age of your current loan all get tested. Some lenders set a higher floor than the program, so the answer depends on which lender reviews your file.
Does a 620 score change how much cash I can take?
Not the leverage cap, but it changes the cost. Conventional cash-out tops out at 80% LTV on a one-unit primary residence. Pricing adjustments rise as the score falls, so the same cash costs more at 620. Financed closing costs also reduce what you receive. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
What if my debts are high?
Automated findings allow a total ratio up to 50% on the wholesale programs. Above 45% on a cash-out, expect a reserve requirement. Paying down debt before applying can help on both fronts. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Would a rate-and-term refinance be easier?
Often, yes. It reaches 95% LTV on a one-unit primary residence but gives you only incidental cash back. If your goal is a better structure and not cash, it is worth comparing against a cash-out.
I refinanced recently. Can I take cash out now?
Generally not. The loan being paid off must be at least 12 months old, note date to note date. Delayed financing is the exception for recent all-cash buyers.
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. Call 828-256-2183 to start.
For your own numbers, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s refinance programs page.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. 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. Freddie Mac Guide Section 4301.5
2. CFPB’s ability-to-repay rule
3. CFPB: Rules, fact vs. fiction
4. Fannie Mae Eligibility Matrix
5. Fannie Mae Selling Guide B2-1.3-03 Cash-Out Refinance Transactions
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Lenders Underwrite a Cash-Out Refinance With Income and Asset Requirements · How Lenders Underwrite a Cash-Out Refinance With a 12-Month Title Seasoning Requirement · Cash-Out Refinance Rules With a Co-Borrower Who Lives Elsewhere
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
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.