The Quick Read: The cash you receive is the new loan amount minus the payoff of the loans being retired, minus any closing costs you roll into the loan. The new loan is capped by the program’s maximum loan-to-value ratio (LTV, the loan as a percentage of the home’s appraised value). Your equity is not the check you get, because the cap limits how much of it you can borrow against. The cap, the payoff, and the costs all come out first.
The Formula in Plain English
Cash to you = new loan amount − payoff of existing liens − closing costs paid from the loan.
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.
Each piece has a source. The appraisal sets value. The program sets the LTV cap. The payoff comes from your current lender. The costs come from your Loan Estimate.
Run it with percentages. Say a home appraises at 100% of value, and the program caps the loan at 80%. You owe 50% of value on the current first mortgage. That leaves 30% of value on the table before costs. Closing costs financed into the loan come off that 30%. What lands in your account is smaller than the equity you see on paper.
A cash-out refinance replaces your current first mortgage with a larger one and pays you the difference. It is not a second loan layered on top. That is the main difference from a home equity loan or a HELOC (a home equity line of credit), which sit behind your first mortgage as separate liens.
How the Loan Gets Built, Step by Step
Across the wholesale programs Lendmire places files with, the sequence is the same. Lendmire’s cash-out refinance programs page covers the options. Here is what happens inside any of them.
1. Eligibility screens. The lender checks how long you have owned the home and how old your current loan is. On conventional cash-out, 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. Exceptions exist for delayed financing (a cash buyer refinancing soon after purchase), inheritance, and legal awards.
2. The appraisal sets the value. Maximum new loan equals the LTV cap times the appraised value. A low appraisal shrinks the ceiling, and your cash with it. This is a common reason the final number lands below the early estimate.
3. Payoffs come out first. The new loan retires your existing first mortgage. It also retires any second lien the lender requires paid off, like a HELOC you drew on for other spending. Per-diem interest (interest accrued through the payoff date) is part of the payoff.
4. Costs are paid from the loan or from your pocket. Closing costs can be rolled into the balance or paid in cash at the table. Rolling them in lowers what you bring but raises the balance. The CFPB notes that rolled-in costs reduce upfront cash but add interest over time.
5. Pricing adjustments are built in. Conventional cash-out loans carry pricing adjustments tied to LTV and credit score. You will not see them as a line item. They show up in the terms you are offered. Fannie Mae’s Selling Guide confirms a loan-level price adjustment applies to certain cash-out refinances.
6. Disclosure, signing, rescission, funding. You get a Closing Disclosure showing cash to you. On a refinance of your home, you generally have a three-day right to cancel after signing, so funds are released after that window, per the CFPB’s home loan toolkit.
What Sets the Ceiling?
The maximum LTV depends on the property and how you use it. For conventional loans across the programs Lendmire works with:
| Property | Cash-out max LTV |
|---|---|
| One-unit primary residence | 80% |
| Two- to four-unit primary | 75% |
| Second home | 75% |
| Investment property | 75% |
Occupancy sets the leverage. That is the one-sentence answer on second homes and rentals: they are eligible, at the lower caps shown. These figures are subject to lender guidelines and full file review.
In Texas, a cash-out on a homestead (a Section 50(a)(6) loan) is capped at 80% of the home’s value by the state constitution. The wholesale no-mortgage-insurance lane described below is not written there.
Credit and debt matter too. The wholesale conventional programs start at a 620 decision score. The automated underwriting finding governs most files, with a total debt-to-income ceiling of 50%. Manually underwritten loans use 36% or 45% ceilings with the reserve and score factors of the agency Eligibility Matrix.
Does Mortgage Insurance Shrink the Check?
Mortgage insurance does not reduce the loan amount directly, but it changes the cost of borrowing near the cap. Conventional mortgage insurance is required above 80% LTV, with one exception: the wholesale no-mortgage-insurance cash-out lane. The standard cash-out limit on a one-unit primary residence is 80% LTV. This separate wholesale lane reaches 89.99% LTV with no mortgage insurance, which is why its ceiling sits above the standard figure. It needs a 680 score, a 50% ratio ceiling, a thirty-year fixed rate, a primary residence, a conforming loan balance, and 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.
Most standard cash-out loans stop at 80%, so insurance rarely comes up. When it does, Lendmire’s conventional program sheet lists typical annual premiums of 0.58% to 1.86% of the balance. That is the sheet’s range, not a quote. The borrower may request cancellation at 80% of original value, and the servicer must end it automatically at 78%, under the Homeowners Protection Act.
Where the General Rule Breaks
Streamlines cannot deliver cash. The FHA Streamline allows no cash back beyond minor closing adjustments, according to HUD’s reference guide on appraising refinances, which is archived guidance. The VA IRRRL (Interest Rate Reduction Refinance Loan) cannot take equity out either. If you want cash from a government-backed loan, you need the full cash-out version of that program.
Limited cash-out can flip to full cash-out. A rate-and-term refinance, also called limited cash-out, pays off your first mortgage, costs, and a purchase-money second lien, with only incidental cash back. Fannie Mae’s limit is the lesser of 2% of the new loan or $2,000. Freddie Mac’s is the greater of 1% of the new loan or $2,000. Pay off a non-purchase second lien or take more cash, and the loan is reclassified. The lower cash-out LTV and pricing then apply.
VA cash-out adds a funding fee. The VA funding fee on a cash-out refinance is 2.15% for first use and 3.3% for subsequent use, per VA Circular 26-23-06, Exhibit B. Reduced down-payment rates do not apply to refinances. That circular is dated, so confirm the current schedule with your lender. The fee can be financed, which raises the balance and trims your cash. VA cash-out also requires a Certificate of Eligibility and that you live in the home.
Recent purchases. Bought the home in the last few months? The 6-month title clock can block you. Delayed financing is the exception for cash buyers, and cash returned is tied to documented purchase cost, not appraised value.
Paid-off homes. A home with no mortgage can still be cashed out. There is no payoff to subtract, so more of the cap reaches you.
Student loan cash-out. Fannie Mae waives the cash-out price adjustment when proceeds pay off student loans, though the standard cash-out LTV applies.
Worked Example: Two Ways to Handle Costs
Picture a one-unit primary residence under the 80% cap. The current first mortgage is 45% of the appraised value. There is no second lien.
Costs rolled in. The new loan is 80% of value. Subtract the 45% payoff, which leaves 35% of value. Now subtract the closing costs financed into the loan, and what remains is your cash. You bring nothing to the table.
Costs paid in cash. The new loan is still 80% of value. Subtract the 45% payoff, and the full 35% of value is your proceeds. You wrote a separate check for the costs, so they appear on a different line of the disclosure and do not reduce your proceeds.
Neither is better by default. The two paths trade a larger check today against a smaller balance owed afterward, and which one fits depends on how much cash you want in hand and how much you want to carry in the loan.
Can the result go negative? Yes. If the payoff plus costs exceeds the new loan, you owe money at closing. That is not a cash-out at all. It is a refinance with a bill.
How to Read Your Closing Disclosure
Your Loan Estimate gives the early number. The Closing Disclosure gives the final one. Two lines matter most:
- Cash to Close. Shown as “to borrower” when you are receiving money and “from borrower” when you owe it.
- Closing Costs Financed (Paid from your Loan Amount). The rolled-in portion, per the CFPB’s Regulation Z disclosure rule.
Some costs can rise between estimate and closing, though federal rules limit increases on certain fees. Compare both documents line by line. If the Closing Disclosure shows less cash than expected, look first at the appraisal value, the payoff figure with per-diem interest, and any escrow or prepaid items.
Reverse-Solving for Your Target
Need a specific amount? Work backward. Add your payoff, your financed costs, and the cash you want. Divide by the appraised value. That is the LTV you need. If it exceeds the cap for your property type, the target is out of reach. Either lower the target or look at a different structure.
Key Terms Defined
LTV (loan-to-value): The loan balance as a percentage of the home’s appraised value.
Seasoning: The waiting period a loan or ownership must meet before a refinance qualifies.
Per-diem interest: Interest that accrues daily on your old loan until it is paid off.
Loan-level price adjustment: A pricing hit built into the terms based on LTV and credit score, not shown as a separate fee.
Right of rescission: Your three-day window to cancel a refinance of your home after signing.
What the Decision Looks Like in Practice
Cash from equity is a one-time use of that equity. The CFPB found that borrowers often use cash-out proceeds to pay down credit card and auto debt, and that credit scores rose after the refinance, then gradually worsened as balances crept back. Treat the cash as borrowed against your home, not as free money.
A bigger balance usually means a bigger monthly obligation unless the term offsets it. You also reset the payoff clock. Weigh that against a home equity loan or HELOC, which leave your first mortgage untouched. If your current first mortgage has terms you want to keep, a second lien may serve better than replacing it.
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
Can I get 100% of my equity out?
No. The program’s LTV cap limits the new loan, and the payoff and costs come out of that. On a conventional one-unit primary residence, the cap is 80% of value. Equity above that cap stays in the home.
Does the cash arrive the moment I sign?
No. On a refinance of your primary home, a three-day right to cancel applies after signing, and funds are released after it ends. The Closing Disclosure shows the amount you are due.
Why is my final cash lower than my first estimate?
Usually the appraisal came in lower, the payoff grew with per-diem interest, or costs moved. Compare the Loan Estimate to the Closing Disclosure line by line. A lower appraised value cuts the ceiling directly.
Can a streamline refinance give me cash?
Not meaningfully. The FHA Streamline allows only minor closing adjustments, and the VA IRRRL cannot take equity out. Full cash-out versions of those programs exist for that purpose.
Is it worth rolling closing costs into the loan?
It depends on your cash position. Rolling costs in lowers what you bring but raises the balance and the interest you pay. Paying in cash does the opposite. Either way, program figures are 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.
For current guidelines and terms, see Lendmire’s refinance programs page.
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. CFPB, Closing Disclosure explainer
2. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
3. CFPB, Your Home Loan Toolkit
4. HUD HOC Reference Guide, Appraising Refinances
5. VA Circular 26-23-06, Exhibit B
6. CFPB’s Regulation Z disclosure rule
7. CFPB newsroom: cash-out borrowers
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 to Qualify and Apply for a Cash-Out Refinance With Closing Costs Rolled In · How Much a Cash-Out Refinance Lends Versus a Personal Loan · How Much Overtime Income a Cash-Out Refinance Lender Will Count
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
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.