The Quick Read: The right program depends on your credit, your equity, and whether you hold a government-backed loan, but the leverage ceilings are clear. A standard conventional cash-out refinance on a one-unit primary residence tops out at 80% loan-to-value. One wholesale lane reaches 89.99% with no mortgage insurance for strong borrowers on a thirty-year fixed loan. The FHA Streamline and VA IRRRL are not cash-out products at all.
LTV, or loan-to-value, is the new loan divided by the home’s appraised value. The appraisal sets your ceiling, and the ceiling sets your cash.
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: 7.24% as of October 29, 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 Counts as a Cash-Out Refinance?
A cash-out refinance is a new first mortgage that pays off your old one and puts the extra money in your pocket. The new loan is bigger than the old balance. The difference, after closing costs, is your cash.
It is not a HELOC. A home equity line sits behind your existing mortgage as a second lien. A cash-out refinance replaces the mortgage you have. Your payment, term, and interest cost reset on the whole balance, not just the new money.
The opposite product is a rate-and-term refinance, also called limited cash-out. The new loan pays off the old first mortgage, closing costs, and sometimes a purchase-money second lien, with only incidental cash back. That product can run to 95% LTV on a one-unit primary residence. People see that number and assume it applies to cash-out. It doesn’t.
Here is the common misreading. “80% LTV” does not mean you can take out 80% of your equity. It means the new total loan can be up to 80% of the home’s value. If your current balance is already 60% of value, you have about 20 points of value to work with, before costs.
How Do the Programs Compare on One-Unit Primary Residences?
FHA and VA each have their own cash-out loans. Their streamline cousins pay off old loans but don’t deliver cash. Across the wholesale programs Lendmire places files with, the real decisions happen in choosing among these options.
| Program | Delivers cash? | Leverage ceiling |
|---|---|---|
| Conventional cash-out | Yes | 80% LTV, one-unit primary |
| Wholesale no-MI lane | Yes | 89.99% LTV, strong files only |
| FHA cash-out | Yes | Set by HUD; confirm current rule |
| VA cash-out | Yes, eligible borrowers | Set by VA; confirm current rule |
| FHA Streamline / VA IRRRL | No | Not a cash-out product |
| Conventional rate-and-term | Incidental only | 95% LTV, one-unit primary |
The FHA and VA ceilings are set and updated by the agencies, and lender overlays can sit below them. Check the agency pages, linked below, before you build a plan around a number.
Lendmire’s cash-out refinance programs page lays out the lanes it arranges. Lendmire is a mortgage broker, not a lender. It shops wholesale lenders and matches your scenario to the program that fits.
Which Program Fits Which Borrower?
The best program for your situation comes from five things: credit score, equity position, military status, how much cash you need, and how you document income. Match the borrower to the profile, then check the numbers. Here is how that usually sorts out.
You have strong credit and a conforming-size loan. Conventional cash-out is the baseline. The 80% ceiling applies. If you need more than that ceiling allows, the wholesale lane is worth a look. It reaches 89.99% LTV with no mortgage insurance, but only at a 680 score, a 50% ratio, a thirty-year fixed loan, a primary residence, a conforming balance, and six months of seasoning. That is a narrow doorway. Many borrowers clear it. Some don’t. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
You are an eligible veteran or service member. The VA cash-out loan was built for you, and its leverage rules differ from conventional. The VA’s cash-out refinance page explains eligibility and the funding fee. A funding fee generally applies unless you are exempt. Whether it beats conventional depends on your goal, the fee, and the terms of the new loan. Veterans don’t automatically get the best deal.
You already hold an FHA loan and need cash. The FHA Streamline will not give it to you. FHA cash-out follows HUD’s Handbook 4000.1, including occupancy and ownership-period rules, and carries FHA mortgage insurance. It can fit borrowers whose credit would struggle on a conventional file.
You need a small cash amount, or none. Ask whether a rate-and-term refinance does the job. It reaches higher leverage and avoids the stricter cash-out gates. Need to consolidate a purchase-money second lien? That can be done in a rate-and-term, with only incidental cash back.
Your balance is above the conforming limit. Jumbo lanes take over. They carry their own score floors (660 on the lanes Lendmire works with), their own leverage, and loans that can run up to $5,000,000. Jumbo cash-out leverage is set lane by lane, so don’t assume the conventional 80% carries over.
How Is a Cash-Out Loan Underwritten, Step by Step?
Underwriting a cash-out loan means a lender tests your value, your debts, your income, and your history, in that order of importance for the ceiling. Each step can shrink your cash. Here is the sequence from the broker’s chair.
1. You choose a goal. A set cash amount, a debt payoff, or a project budget. Say it plainly. The goal decides the program.
2. You apply and the lender pulls credit. Conventional wholesale programs start at a 620 decision score. Many files that reach the highest leverage need a good deal more.
3. The lender runs your file. Automated underwriting reviews income, assets, score, and debts. The total ratio, meaning your monthly debts against your monthly income, can reach 50% on an automated approval. Manually underwritten loans sit at 36% or 45%, with reserve and score factors from the agency’s Eligibility Matrix.
4. An appraisal sets the value. This is the pivotal number. Cash-out appraisal waivers are limited, so plan on a full appraisal.
5. The lender checks seasoning. The mortgage you are paying off must be at least 12 months old, counted note date to note date. You must have been on title for at least 6 months. Exceptions exist for delayed financing, inheritance, and legal awards.
6. You receive disclosures. The CFPB’s Owning a Home resource explains the Loan Estimate and Closing Disclosure you will see. Compare them line by line.
7. A right-of-rescission window applies. On a refinance of your primary residence, funds are released only after that short window ends.
Fannie Mae publishes the eligibility rules behind most of this in its Selling Guide. Lenders may add stricter overlays, so the guide is a floor for what a lender may do, not a promise of what one will.
How Do You Calculate Your Real Cash?
Your real cash is the ceiling loan minus your payoff and minus closing costs. The ceiling is not your cash. Many borrowers stop at the first step. Don’t.
The formula runs in three moves. First, multiply appraised value by the ceiling. Second, subtract the payoff of your existing first mortgage, and any lien the new loan must clear. Third, subtract closing costs, and any mortgage insurance or funding fee you roll into the balance.
Run a scenario in points of value instead of dollars. Say you expect the home to appraise at 100 points, and your current balance is 60. At an 80% ceiling, the new loan can reach 80. That is 20 points before costs.
Now the appraisal comes in 5% light, at 95 points. The ceiling drops to 76. Your balance is still 60. You are down to 16 points before costs. A 5% miss on value cut your cash by a fifth. (Appraisals are blunt that way.)
Now picture a borrower whose balance is already 75% of value. At an 80% ceiling, that is 5 points of room. Closing costs could eat most of it. That borrower is better off asking whether the cash is worth the reset, or whether a different structure fits.
Costs are real. Mortgage insurance and the VA funding fee can be financed into the loan, which raises the balance and shrinks your cash. Described mechanically, the insurance rules work like this. Mortgage insurance is required above 80% LTV on conventional loans. You can ask to cancel it at 80% of original value with good payment history, no subordinate liens, and no decline in value. The servicer must end it automatically at 78%.
What If You Are Near the Ceiling?
If you are close to the cap, you have four moves: pay down the balance, wait for value to rise, switch products, or choose a different structure. Each fits a different borrower.
Pay down first. Even a modest reduction opens room under the ceiling. It also keeps a cushion if the appraisal comes in light.
Wait for value. If your home has appreciated, a fresh appraisal can lift the ceiling without any pay-down. If the market is flat, waiting may not help.
Switch products. If your need is small, rate-and-term may fit. If you are a veteran, VA cash-out may reach further. If strong credit is in hand, the 89.99% wholesale lane may open room that 80% closes.
Keep a cushion. The most you may borrow and the most you should borrow are different numbers. A loan sized right at the ceiling leaves no room for a surprise. A thin equity margin turns a dip in value into a real problem.
Existing second liens matter too. A HELOC or second mortgage counts toward the combined position, so it affects how much a new first mortgage can reach. Tell your broker about every lien on the home up front.
Where Does the General Rule Break?
The 80% rule bends or breaks in several named cases. These are the edge cases that catch borrowers off guard.
Occupancy. A one-unit primary residence gets the most favorable leverage. Two- to four-unit primary residences and second homes sit at 75% on conventional cash-out. Occupancy decides leverage. That is the whole point.
Adjustable-rate loans. Agency ceilings run lower on adjustable loans than on fixed ones. The wholesale no-MI lane requires a thirty-year fixed loan.
Seasoning. Twelve months on the loan being paid off, six months on title. Miss either gate and the file stalls. Exceptions exist: delayed financing for someone who bought with cash, inheritance, and legal awards. Each has its own conditions in the Selling Guide.
Texas homesteads. A cash-out on a Texas homestead is capped by the state constitution at the agency figure. The wholesale 89.99% lane is not written there.
Streamlines. The FHA Streamline and VA IRRRL exist to refinance an existing government loan with limited credit review and a net tangible benefit test. The IRRRL carries a 0.5% funding fee unless you are exempt. They don’t deliver cash. The VA’s IRRRL page spells out the difference.
Credit events. Agency waiting periods apply after a bankruptcy, foreclosure, or short sale: four years from a chapter 7 discharge, seven years from a foreclosure, and four years from a short sale or deed-in-lieu. Documented extenuating circumstances can shorten those windows.
Lender overlays. Here is the catch. A program ceiling is not a guarantee. A given lender may set a higher score floor or a lower leverage cap than the agency allows. That is why the lenders that write your file depend on your scenario, and why a broker who shops several wholesale lenders can matter.
What Do Lenders Look For Before You Apply?
Wholesale lenders look for a clean path from value to payoff to ratios. Before you apply, gather what answers those questions. Think of it as a self-test for whether you sit within the max.
- Value. A realistic read on what the home appraises for. Recent nearby sales are a start. The appraiser decides.
- Payoff. Your current first mortgage balance and any other lien on the home.
- Seasoning. Your loan’s note date and the date you took title.
- Credit. Your score, and any credit event in the past several years.
- Ratios. Monthly debts against monthly income. Keep the total near or under 50% for automated approval, lower for manual.
- Occupancy. You live in the home as your primary residence.
- Loan type. Fixed or adjustable, and whether your balance fits the conforming limit.
- Purpose. How much cash you need and what for.
If every item checks out, you are probably within the max for a conventional file. If one fails, the program choice may change.
Key Terms Defined
Loan-to-value (LTV): The new loan divided by the home’s appraised value, shown as a percentage.
Cash-out refinance: A new first mortgage larger than your old one, with the difference paid to you after costs.
Rate-and-term refinance: A new loan that pays off the old mortgage and costs without giving meaningful cash back. Also called limited cash-out.
Seasoning: The minimum time you have held the loan or the title before a lender will refinance.
Mortgage insurance: Coverage that protects the lender on loans above 80% LTV. It cancels on request at 80% and ends automatically at 78%, subject to the conditions above. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Delayed financing: An exception that lets a cash buyer take cash out without the usual seasoning wait.
Net tangible benefit: A test for streamline loans showing the borrower comes out ahead from the refinance.
Frequently Asked Questions
What is the highest LTV allowed on a cash-out refinance of a one-unit primary home?
On a standard conventional file, it is 80%. One wholesale lane reaches 89.99% with no mortgage insurance, but only for borrowers with a 680 score and a 50% ratio on a thirty-year fixed loan with a conforming balance and six months of seasoning. FHA and VA set their own ceilings, and lenders may apply stricter overlays. All figures are subject to lender guidelines and full file review.
Can the FHA Streamline or VA IRRRL give me cash?
No. Both are streamlines for refinancing an existing government loan, and neither is meant for pulling out equity. If you hold an FHA or VA loan and need cash, look at FHA cash-out or VA cash-out instead. Those are separate loans with their own rules.
Is a cash-out refinance the same as a HELOC?
No. A cash-out refinance is a new first mortgage that replaces your current one. A HELOC is a second lien that sits behind it. The refinance resets your payment and term on the whole balance, while a HELOC leaves your first mortgage alone.
How long must I own the home before cashing out?
For conventional cash-out, the mortgage being paid off must be at least 12 months old, counted note date to note date, and you must have been on title at least 6 months. Delayed financing, inheritance, and legal-award exceptions exist. FHA adds its own occupancy and ownership-period rules.
What happens if the appraisal comes in low?
The ceiling shrinks because it is a percentage of the appraised value. Your payoff stays the same, so the cash shrinks faster than the value did. A cushion below the ceiling gives you protection. Ask your broker to run the numbers at a lower value before you commit.
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. Reach the team at 828-256-2183 or request a quote.
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
5. VA Interest Rate Reduction 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: Owelty Lien vs Cash-Out Refinance for Buying Out a Co-Owner · Does a Fourplex Cash-Out Refinance Need More Reserves Than a Duplex? · Can You Do a Cash-Out Refinance on a Home Under a Blanket Lien?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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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
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.