The Quick Read: Qualifying at the minimum score means clearing the program’s score floor, then fitting inside the leverage cap, the debt ratio limit and the seasoning clocks. Across the wholesale conventional programs Lendmire places files with, the decision score starts at 620. Conventional cash-out is capped at 80% LTV on a one-unit primary residence, and DSCR cash-out programs sit lower, with a ceiling of 75% LTV. Everything below is subject to lender guidelines and full file review, and nothing here is a commitment to lend.
What Is a Cash-Out Refinance?
A cash-out refinance replaces your current mortgage with a larger one and hands you the difference in cash. You keep one loan, one payment and one lien. The federal consumer-finance regulator describes it the same way: you swap your existing mortgage for a bigger mortgage and take the difference, and you often pay closing costs.
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.
LTV means loan-to-value: the new loan balance divided by the appraised value of the home. It controls how much cash you can take. Lendmire’s cash-out refinance programs page lays out the lanes Lendmire, a mortgage broker, arranges through wholesale lenders.
What Is the Minimum Credit Score?
It depends on the program, and no single number works everywhere. On the conventional side, the wholesale programs start at a 620 decision score. An adjustable rate under manual underwriting starts at 640. Jumbo lanes start at 660.
FHA and VA set their own floors. Widely reported FHA tiers run lower than conventional, but lenders set their own higher minimums. VA sets no score on its cash-out page. It says you must meet VA’s standards and your lender’s standards for credit and income.
Here is the catch. An agency floor is not an approval promise. Lenders add overlays, which are stricter rules of their own, and a score at the floor gets scrutiny in every other part of the file.
| Loan type | How score flexibility works |
|---|---|
| Conventional | Starts at a 620 decision score on wholesale programs |
| FHA | Lower agency floor; lenders often set higher |
| VA | No agency score; lender sets the standard |
| Jumbo | Starts at a 660 decision score |
How Is the Loan Underwritten, Step by Step?
Underwriting is the lender’s review of whether the file fits the program. For a cash-out at the minimum score, it runs in this order.
1. Score. The lender pulls credit. When several borrowers are on the loan, lenders generally work from the lowest qualifying score on the file, so one weak score can set the tier for everyone.
2. Seasoning. The first mortgage being paid off must be at least 12 months old, counted note date to note date. A borrower must also have been on title for six months. Fannie Mae’s Selling Guide and Freddie Mac’s Guide both set these clocks.
3. Income and ratios. The total debt ratio, meaning monthly debts divided by gross monthly income, tops out at 50% on the wholesale programs when the automated finding approves the file. Manually underwritten loans use 36% or 45%, with reserve and score factors from the Eligibility Matrix.
4. Reserves. Reserves are savings left after closing. On Fannie Mae files run through its automated system, a ratio above 45% requires six months of reserves.
5. Appraisal. The appraised value sets the LTV cap, and the cap sets the most cash you can take.
6. Disclosures and closing. You receive a Loan Estimate, then a Closing Disclosure. Compare them line by line.
How Much Cash Can You Take Out?
Conventional cash-out tops out at 80% LTV on a one-unit primary residence, but that figure belongs to conventional financing, not to a DSCR loan. DSCR cash-out on an investment property is capped at 75% LTV, so occupancy and loan type both set the leverage. Every figure here varies by lender and program, and guidelines, property type, leverage, and credit profile all apply.
Run the math in percentages. Say your home appraises at 100 units of value and you owe 50% of it. At the 80% cap, the new loan can reach 80% of value. The gap, 30% of value, covers your payoff, closing costs and cash to you. The cash is whatever remains after the payoff and costs.
Texas has its own rule. A cash-out on a homestead is capped at 80% of the home’s value by the state constitution, and the no-mortgage-insurance wholesale lane below is not written there.
FHA works the same way. FHA cash-out refinances are limited to 80% of the home’s value, a cap set in the current FHA rulebook.
Is There a Mortgage Insurance Catch?
Conventional cash-out has its own leverage ceiling, so insurance rarely comes up on a standard cash-out. It matters mainly where leverage goes above 80%, such as a rate-and-term refinance. Lendmire’s conventional program sheet lists typical annual premiums of 0.58% to 1.86% of the balance, where insurance applies. That is a program-sheet range, not a quote. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The exception is a wholesale lane that reaches 89.99% LTV with no mortgage insurance. It needs a 680 score, a 50% ratio, a thirty-year fixed rate, a primary residence and a conforming balance. It carries its own six months of seasoning. Note the score: it sits above the minimum, so it rewards a borrower who raises the score first. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Credit also affects cost. Freddie Mac’s cash-out product page says a credit fee tied to score and LTV applies to cash-out refinances. Plan for that before you decide the cash is worth it.
Where Does the General Rule Break?
Four edge cases change the answer.
- Recent cash buyer. Delayed financing lets a buyer who paid cash for the home borrow against it inside the six-month window. The purchase must be documented as made with no mortgage. The new loan is capped near your documented investment plus financed closing costs.
- Inherited or awarded property. Inheritance and legal-award exceptions can waive the title clock.
- Co-owner buyout. Buying out a partner or ex-spouse under a written agreement is a limited cash-out transaction at both agencies. The retaining owner cannot take extra cash from it.
- A HELOC in the way. Paying off a second lien you used for spending turns a limited cash-out into a full cash-out, with the lower leverage cap and higher pricing. Only a purchase-money second lien stays inside limited cash-out.
A refinance is different. It allows only incidental cash back. Fannie Mae’s limit is the lesser of 2% of the new loan or $2,000. If you want real cash, you need the cash-out path.
If you already hold an FHA loan or a VA loan, the FHA Streamline and VA IRRRL exist as streamlines for rate-and-term changes. They are not cash-out tools.
What Strengthens a Minimum-Score File?
A score at the floor leaves no room for weakness elsewhere. Lenders weigh several levers together, and you control some of them.
- Lower the balance request. Taking less cash puts your LTV below the cap.
- Lower the debt ratio. Paying off a small installment loan can move you under a ratio threshold.
- Build reserves. Savings after closing offset a thin score.
- Fix errors. Dispute wrong items on your credit reports before you apply.
- Pay down card balances. Utilization moves scores faster than almost anything else.
- Mind credit events. The agencies set waiting periods: 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.
How Do You Apply?
Work through this order.
1. Pull your own reports and check all three bureaus for errors.
2. Confirm your clocks. Count loan age and time on title.
3. Estimate your equity using a realistic value, not a hoped-for one.
4. Gather documents. Expect recent pay stubs, tax returns if you are self-employed or have other income to document, bank statements, your current mortgage statement, homeowners insurance and ID.
5. Apply and compare. Rate-shop within a short window so the credit pulls count as one inquiry for scoring. Compare the Loan Estimates side by side.
6. Appraisal and underwriting. Respond to conditions promptly.
7. Closing. On a primary residence you get a right of rescission, a short period after signing when you can cancel. Funds are released after it ends.
Why Might You Be Denied, and What Next?
The lender must tell you why. Fix the specific item and reapply.
If your score is just under a cutoff, you have three choices. Wait and improve it. Switch to a program with a different floor. Or reduce the cash requested. A broker can show you which lanes fit before you spend on an appraisal.
Cash-Out Refinance, HELOC or Home Equity Loan?
| Feature | Cash-out refinance | HELOC | Home equity loan |
|---|---|---|---|
| Your first mortgage | Replaced | Stays | Stays |
| Number of loans | One | Two | Two |
| Cash delivery | Lump sum | Draw as needed | Lump sum |
| Best when | Current loan terms are worth replacing | You need flexible access | You need a fixed sum, keeping your first loan |
If your current mortgage terms are good, replacing them is the real cost of a cash-out. The CFPB’s home equity guide warns a cash-out may extend your payoff time and raise your monthly payment, because you replace your loan with a larger one.
What Are the Risks?
Your home secures the loan. A bigger balance means less equity and a larger obligation. Some borrowers use the cash on debt. The CFPB found cash-out borrowers often pay down credit card and auto debt, but card balances trended back toward earlier levels within a year. Paying off cards helps only if the spending stops.
A cash-out can also reset your payoff clock. 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
LTV (loan-to-value): The new loan balance divided by the home’s appraised value.
Seasoning: The waiting period before you can cash out, measured by loan age and time on title.
Overlay: A lender’s own rule that is stricter than the agency minimum.
Reserves: Savings you still hold after closing.
Delayed financing: A cash-out on a home you bought with cash, allowed inside the usual title clock.
Debt ratio: Monthly debts divided by gross monthly income.
Frequently Asked Questions
What is the lowest credit score for a cash-out refinance?
On the wholesale conventional programs Lendmire works with, it starts at a 620 decision score. FHA and VA are set differently, and lenders often add higher minimums. Programs and overlays change, so confirm against your own file.
Does a minimum score cost more?
Usually, yes. Freddie Mac applies a credit fee tied to score and LTV on cash-out loans. A lower score means a higher fee tier, built into your terms rather than shown as a separate charge.
Can I cash out right after buying?
Not usually. A borrower must be on title for six months, and the loan being paid off must be 12 months old. Delayed financing is the exception for cash purchases.
Does applying hurt my credit?
A lender pulls your credit, which creates an inquiry. Shopping lenders within a short window is generally treated as one inquiry for scoring. Space your applications out and you multiply the damage.
Is this the same as a HELOC?
No. A HELOC adds a second loan and leaves your mortgage alone. A cash-out replaces the whole mortgage.
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. Veterans can also read Lendmire’s piece VA Cash-Out Refinance Requirements With a 740 Credit Score. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
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
1. CFPB Ask CFPB: HELOC alternatives
3. Fannie Mae Selling Guide B2-1.3-03
4. Freddie Mac Seller/Servicer Guide 4301.5
5. Freddie Mac cash-out refinance product page
7. CFPB: CFPB Report Finds Cash Out Mortgage Refinance Borrowers Improve Credit Scores
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 the Cash-Back Line Works on a Cash-Out Refinance · How a Cash-Out Refinance Works for a Big Expense · How a No-Cost Cash-Out Refinance Works
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
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.