The Quick Read: The program that fits depends on your current loan type, how you occupy the home, and how much equity is left after the leverage cap. There is no single winner. Six months is also only half of the conventional test, because a second clock runs on the loan you are paying off. Clear both clocks, then match your situation to a conventional, FHA, or VA path.
Key Takeaways
- Conventional cash-out has two clocks: at least one borrower on title for six months, and the first mortgage being paid off at least 12 months old, counted note date to note date.
- A recent refinance resets the second clock, even if you have owned the house for years.
- Standard conventional cash-out tops out at 80% loan-to-value (LTV) on a one-unit primary residence. A separate wholesale lane reaches 89.99% with no mortgage insurance, and it has its own conditions. Cash-out leverage is lower, at 75%, on two- to four-unit homes, second homes, and investment property.
- FHA and VA streamlines give no cash back. Cash from an FHA or VA loan means their cash-out versions.
- Exceptions exist: delayed financing for cash buyers, inheritance, legal awards, and co-owner buyouts.
Lendmire’s cash-out refinance programs page covers the conventional lane in summary. This article walks through the mechanics in more depth. Lendmire is a mortgage broker. It arranges these loans through wholesale lenders and does not lend itself.
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.
Which Clock Are You Counting?
You are counting two clocks, not one. Many borrowers who think they are “past seasoning” have only checked the first.
| Clock | What it measures | How it is counted |
|---|---|---|
| Title clock | Time at least one borrower has held title | Deed or title commitment, to the new loan’s funding or note date |
| Loan-age clock | Age of the first mortgage being paid off | Note date of the old loan to note date of the new one |
Seasoning is the waiting period a lender wants before it will let you take equity out. The reasoning is simple. A lender wants proof that the home and the loan have some history before it increases the debt.
The title clock is the one people know. Six months on title, and you are through. Except you are not, because of the second clock. Here is the catch: a refinance creates a brand-new note. Picture a homeowner who has lived in a house for six years and refinanced eight months ago. Their first mortgage is eight months old. Their title clock is long cleared, but the loan-age clock is four months short.
Best Program by Situation
The best program for your situation follows from four facts: the loan you hold today, how you occupy the home, how much equity survives the cap, and whether you are a veteran. This table shows how those facts usually sort out.
| Your situation | Likely path | What limits you | Confirm with the lender |
|---|---|---|---|
| Conventional loan, both clocks cleared | Conventional cash-out | 80% LTV cap, credit, ratios | Appraised value and payoff |
| Refinanced recently | Wait, or a different path | Loan-age clock | Note date of current loan |
| Bought with cash | Delayed financing | Cash-out pricing still applies | Proof of the cash purchase |
| Existing FHA loan, want cash | FHA cash-out (not Streamline) | Occupancy, equity left | Current FHA cash-out limits |
| Veteran, want cash | VA cash-out | Certificate of Eligibility, occupancy | VA’s lender requirements |
| Want a lower payment, no cash | Rate-and-term or streamline | Net tangible benefit | Existing loan type |
| Inherited or awarded the home | Named exceptions | Documentation | Which exception applies |
Notice what the table does not do. It does not rank the programs by price. A cheaper-looking program that you cannot qualify for is not an option. The program that works is the one whose rules your file already satisfies. Brokers shop multiple wholesale lenders for exactly that reason, since the lenders that write a given scenario depend on property type, credit, leverage, and documentation.
How a Cash-Out Refinance Is Underwritten, Step by Step
A cash-out file moves through the same sequence almost every time. Knowing the order tells you where a problem will surface.
1. The lender counts the title clock. It checks how long at least one borrower has held title, usually from the deed or a title commitment. Fannie Mae’s Selling Guide measures to the new loan’s disbursement date. Freddie Mac’s Guide measures to the note date. The difference matters only at the margin.
2. The lender counts the loan-age clock. The old first mortgage must generally be 12 months old. This gets documented in the file, for example from the credit report or title commitment.
3. The lender confirms occupancy. Occupancy sets the leverage on a conventional cash-out. FHA and VA cash-out loans are for homes you live in.
4. An appraisal sets the value. The appraised value drives the cap. Cash available is value times the cap, minus your payoff, minus any other liens, minus financed costs.
5. Income, assets, credit, and ratios get reviewed. A reserve trigger: on automated casefiles, a total debt-to-income ratio above 45% calls for six months of reserves. Reserves are the savings left over after closing.
6. Pricing gets set. Cash-out carries pricing adjustments that rise with higher leverage and weaker credit.
7. Disclosures and signing. You receive a Loan Estimate, then a Closing Disclosure. A short federal rescission window follows signing, and funding comes after it. The CFPB’s Home Loan Toolkit explains both documents, and says that on a refinance you should consider how long monthly savings take to repay the cost of the refinance.
That last point deserves attention. A cash-out is not a savings play. It replaces your old note with a new, larger one, and the new terms apply to the full balance, not just the cash you receive.
Conventional Cash-Out: Leverage, Credit, and the No-MI Lane
Conventional cash-out is the main lane for borrowers with a conventional loan today. On a one-unit primary residence, the cap is 80% LTV. On two- to four-unit principal residences, second homes, and investment property, the cap is 75%. Occupancy sets the leverage. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Credit is the other gate. Across the wholesale conventional programs Lendmire works with, the starting decision score is 620. The automated underwriting finding governs most files, and the total ratio ceiling is 50%. Manual underwriting is stricter: 36% or 45% with the reserve and score factors in the agency Eligibility Matrix.
Mortgage insurance is required above 80% LTV on the agency path, except in the wholesale no-MI cash-out lane described next. It is a policy that protects the lender, not you, and you pay for it. You may request cancellation at 80% of the original value with good payment history, no subordinate liens, and no decline in value. The servicer must end it automatically at 78%. Because the standard cash-out cap is 80%, insurance rarely enters a conventional cash-out at all.
One wholesale lane does go further. It reaches 89.99% LTV with no mortgage insurance. It requires a 680 score, a 50% ratio, a thirty-year fixed rate, a primary residence, a conforming loan balance, and its own six months of seasoning. This lane is the one exception to the mortgage-insurance rule above. Exact terms depend on lender and investor guidelines, credit profile, reserves, and property review.
Texas works differently. A cash-out on a homestead there (a Section 50(a)(6) loan) is capped at 80% of the home’s value by the state constitution, and the 89.99% no-MI lane is not written in Texas.
Here is where a broker earns the fee. Whether your file fits the 80% lane, the 89.99% no-MI lane, or neither depends on score, ratio, and property. A borrower at a 640 score and a borrower at a 700 score are not shopping the same menu. Lendmire matches the scenario to the program, and the lender makes the credit decision.
FHA and VA: Streamlines Are Not Cash-Out
The FHA Streamline and the VA IRRRL are no-cash-out products. If you want cash and hold a government loan, a streamline is the wrong tool.
FHA. The FHA Streamline is for an existing FHA loan. It carries no appraisal and limited credit review, with a net tangible benefit test: the refinance has to help you in a measurable way. FHA rate-and-term refinancing, with an appraisal, reaches 97.75% LTV. Taking equity out of an FHA loan means FHA’s cash-out product, which has its own occupancy rules and its own leverage limit. Confirm both with the lender before you plan around a number. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
VA. The IRRRL is VA’s streamline for an existing VA loan. It carries a 0.5% funding fee unless you are exempt, no VA appraisal, and a net tangible benefit test. Seasoning is the later of 210 days and six payments. A VA cash-out is different. VA’s cash-out page explains that it replaces your current loan with a new one, and can also refinance a non-VA loan into a VA-backed loan. You need a Certificate of Eligibility and must live in the home. You work through a private lender, not VA directly, and VA warns borrowers to be careful with refinance offers.
The seasoning figure above belongs to the IRRRL, so ask your lender whether any seasoning requirement applies to a VA cash-out on your file.
Above the conforming loan limit, jumbo lanes take over. They start at a 660 decision score, reach leverage to 90%, and go to loans of $5,000,000, with a 50% ratio ceiling on the fixed-rate lanes. Leverage on a jumbo cash-out depends on the program and the file, so treat 90% as the ceiling of the lane, not a promise for any one loan.
Where the General Rule Breaks
Delayed financing. A cash buyer does not have to wait. Fannie Mae’s guide lets borrowers who bought within the past six months qualify for a cash-out refinance if the listed requirements are met, measured from purchase date to the new loan’s disbursement date. Cash-out pricing still applies. Delayed financing is not “wait, then refinance.” It is a specific exception with specific documentation.
Homes owned free and clear. No mortgage means no loan-age clock, but it does not mean no cash-out. A refinance on a paid-off home is still a cash-out refinance, and the title clock and leverage cap still apply.
Inheritance and legal awards. Named exceptions to the six-month title rule exist for situations like inheritance. The documentation requirements are specific, so ask early.
LLC-titled homes. If an LLC holds title, Fannie Mae’s guide requires ownership to transfer out of the LLC and into the individual borrower’s name to close. Freddie Mac lets time held by the entity count toward the six months, provided title is transferred.
Co-owner buyouts. Under a written agreement, buying out a co-owner (after a divorce, for instance) is a limited cash-out transaction at both agencies. The borrower who keeps the home may not take proceeds from it.
A HELOC as the first lien. When a home equity line sits in first position, the 12-month loan-age test generally does not apply. Say so to your lender at the start, so the file is scoped correctly.
Manufactured homes. These carry their own, longer ownership rules for the home and the land. Ask the lender what applies.
Rate-and-term versus cash-out. The rate-and-term (limited cash-out) refinance pays off the existing first mortgage, the closing costs, and a purchase-money second lien, with only incidental cash back. It reaches 95% LTV on a one-unit principal residence, and 97% where the existing loan is agency-owned and the first-time-buyer program allows. It is a different category from cash-out, with different leverage and different seasoning. The treatment can change if a second lien was not part of your purchase financing. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
For rentals and second homes, the rules differ from primary-residence rules, so ask your lender which leverage applies. For this article, the occupancy point is all you need.
Three Timelines, Walked Through
These examples use months and percentages only. They are illustrations, not quotes.
The financed buyer. You bought with a conventional mortgage 14 months ago and have not refinanced. Title clock: cleared. Loan-age clock: cleared. The next question is equity. If the appraisal leaves you below the 80% cap after payoff, there is cash to take. If it does not, no seasoning rule will help.
The recent refinancer. You have owned the home for six years but refinanced eight months ago. Title clock: cleared. Loan-age clock: four months short. You wait four months, or you look at a rate-and-term structure if cash is not the point.
The cash buyer. You paid cash three months ago and want your money back out. The title clock is short, but delayed financing is built for this exact case. You document the cash purchase, and cash-out pricing applies. After six months, the conventional route is open too.
The close call. Your timing falls within a few days of the line. Fannie Mae counts to disbursement and Freddie Mac counts to the note date. A file that is one day short under one measure can be fine under the other. Ask the lender which measure applies.
Your Day-One Checklist After Seasoning Clears
Passing the clocks is the start of the file, not the finish. Pull these together before you apply.
- The note date of your current first mortgage (it is on the note and usually on the credit report).
- Your deed or title commitment, to prove the title clock.
- A list of every lien on the home, including any second mortgage or line of credit.
- Your last paystubs, tax documents, and bank statements, as the lender requests.
- A realistic read on what you will use the cash for, and how much of it.
On that last bullet, the CFPB looked at cash-out borrowers and found they often use proceeds to pay down other debts, particularly credit card and auto loan debt. CFPB research also found that credit card balances trended back toward pre-refinance levels within a year, though not fully. The lesson is not to avoid cash-out. It is to plan what the money does, because the debt moved into your mortgage stays there for the life of the loan.
Why You Have Seen Conflicting Answers
Search for this topic and you will find “six months,” “twelve months,” and “no seasoning” all stated as fact. They can all be partly right, for four reasons.
First, there are two clocks, and pages often describe only one. Second, loan type matters: conventional, FHA, and VA each count differently. Third, the 12-month first-mortgage rule is relatively recent, so older pages still describe the six-month title rule alone. Fourth, individual lenders can add their own overlays on top of the agency minimums.
When two answers conflict, ask which clock each one describes and which loan type it covers. That usually resolves it. When it does not, the lender’s own overlay governs.
Cash-Out Versus Keeping the Loan You Have
A cash-out refinance replaces your existing first mortgage. A home equity loan or line of credit leaves it in place and adds a second lien. Which is better depends on how your existing loan compares with current terms, how much you need, and how long you will hold the home.
Waiting is an option too. If the loan-age clock is a few months short, the cost of waiting may be smaller than the cost of an alternative structure. Cost of acting versus cost of waiting is a real trade-off, and a broker can price both paths.
Key Terms Defined
Seasoning: The waiting period a lender requires before it will allow a cash-out refinance.
Title clock: The time at least one borrower has been on the property’s title.
Loan-age clock: The age of the first mortgage being paid off, counted from its note date to the new loan’s note date.
Note date: The date you sign the promissory note, which starts the life of a loan.
Loan-to-value (LTV): The loan balance divided by the home’s appraised value.
Delayed financing: An exception that lets a recent cash buyer take a cash-out loan before the standard waiting period ends.
Limited cash-out (rate-and-term): A refinance that pays off the old loan and costs, with only a small amount of cash back.
Net tangible benefit: A test that a streamline refinance must measurably help the borrower.
Frequently Asked Questions
Does six months of ownership let me do a cash-out refinance?
Not by itself. Six months on title is one conventional requirement. The first mortgage being paid off must also generally be 12 months old, counted note date to note date. If you refinanced recently, that second clock may still be running.
Can I take cash out of an FHA or VA loan with a streamline?
No. To take equity from either loan type, you would need FHA’s cash-out or VA’s cash-out. Each has its own occupancy and eligibility rules that the lender confirms.
I paid cash for my home. Do I have to wait six months?
Not necessarily. Delayed financing is an exception for borrowers who bought within the past six months and meet the listed requirements. Cash-out pricing still applies, and you will need to document the purchase. It is worth raising with your broker before you assume the wait.
Does a recent refinance affect my eligibility?
Yes, because a refinance creates a new note. Your first mortgage is as old as that new note, not as old as the house. If it is under 12 months old, conventional cash-out generally waits until it reaches that age, subject to lender guidelines.
How much cash can I actually receive?
The cap applies to the whole new loan, so your payoff, other liens, and any financed costs come out first. On a one-unit primary residence, conventional cash-out reaches 80% LTV. Whatever is left under that cap, after those items, is the most you can take. An appraisal sets the starting value. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Next Step
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. Bring your note date, your title date, and a rough idea of what the cash is for. Every figure here is subject to lender guidelines and full file review, and none of it 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
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. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
2. Freddie Mac Guide §4301.5, Cash-out refinance Mortgages
3. CFPB, Your Home Loan Toolkit
4. VA.gov, Cash-out refinance loan
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Best Cash-Out Refinance Program After Converting a Detached Garage to an ADU · Best Cash-Out Refinance Program to Leverage Home Equity Without Selling · Best Cash-Out Refinance Program With a Co-Signer on the Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.