The Quick Read: No single program wins for every homeowner. Your loan type, your credit, and what you owe today decide the best fit. On a conventional loan, you can usually borrow up to 80% of your home’s value on a one-unit primary residence. A wholesale lane can stretch that to 89.99% with no mortgage insurance, if you meet its score and ratio tests. Both limits are subject to lender guidelines and full file review.
Key Takeaways
- Your cash equals the maximum loan, minus your payoff, minus other liens, minus closing costs you finance.
- A conventional cash-out tops out at 80% of value on a one-unit primary home. One wholesale lane reaches 89.99%.
- FHA Streamline and VA streamline refinance loans are for lowering a payment. They do not put cash in your hand.
- Appraised value drives everything. A lower appraisal shrinks your cash.
- A new loan replaces your whole mortgage, so the balance and payment can rise even if the cash feels small.
What a Cash-Out Refinance Does
A cash-out refinance replaces your current mortgage with a larger one. The new loan pays off the old one, then pays you the difference. You get cash in a lump sum. You repay it over the new loan’s term.
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.
Equity is the part of your home you own outright. It is the value minus what you owe. A home worth about $500K with a modest balance has plenty of it on paper. But you cannot borrow all of it. Lenders require you to leave a cushion. The size of that cushion depends on the program.
Think of it as two numbers. Gross equity is what you own. Accessible equity is what the program lets you pull. The gap between them is the equity cushion the lender keeps in place.
How Much Can You Actually Pull?
The formula is short. Multiply your appraised value by the program’s loan-to-value cap. That gives the maximum new loan. Subtract your payoff, any other liens you are clearing, and the closing costs you roll in. What is left is your cash.
Loan-to-value (LTV) is the new loan divided by the home’s value. An 80% cap means the new loan cannot exceed 80% of value.
Here is how that plays out on a home worth about $500K. This table is a modeled illustration, not a quote.
| Balance owed (% of value) | Cap at 80% | Cap at 89.99% |
|---|---|---|
| 40% | About 40% of value, less costs | About 50% of value, less costs |
| 60% | About 20% of value, less costs | About 30% of value, less costs |
| 75% | About 5% of value, less costs | About 15% of value, less costs |
Read it this way. At a 60% balance and an 80% cap, you can reach about one-fifth of the home’s value before costs. Closing costs come out of that. If you finance them, they reduce your net cash. If you pay them at closing, you write a check from the proceeds.
The higher lane gives more cash only if you qualify. It carries stricter tests, covered below.
The Programs, Side by Side
Which program fits starts with who you are. Are you a veteran? Do you have an FHA loan now? Is your balance conforming or jumbo? Here is the lay of the land from the wholesale programs I place files with across the 16 states where Lendmire does consumer lending. Lendmire’s cash-out refinance programs page lays out the options in more detail.
| Program | Cash-out leverage | Who it fits |
|---|---|---|
| Conventional cash-out | 80% on one-unit primary home | Most homeowners with a 620+ score |
| Wholesale no-MI lane | Up to 89.99% | 680 score, 50% ratio, 30-year fixed |
| FHA cash-out | Lower cap than conventional; confirm with a loan officer | Owner-occupants with an FHA-friendly profile |
| VA cash-out | Set by VA rules | Eligible veterans and service members |
| Jumbo cash-out | Set by the lane | Balances above the conforming limit |
I leave out exact FHA, VA and jumbo caps here. They shift by lender and file. A loan officer confirms them against your scenario.
Conventional cash-out
This is the default for a primary home. The wholesale conventional programs start at a 620 decision score. That is the score the underwriting system uses after pulling all your credit data. The automated finding governs most files. Total debt-to-income, meaning your monthly debts as a share of your monthly income, can run up to 50% when the automated system approves it. Manually underwritten loans use tighter ratios, either 36% or 45%, with reserve and score requirements.
On a one-unit primary residence, the cap is 80%. On a two- to four-unit primary home, a second home, or an investment property, the cap drops to 75%. Occupancy decides the leverage. That is all this article says about rentals.
Above 80%, mortgage insurance would normally apply. On a cash-out at 80%, you are at the line, so none is needed.
The wholesale lane to 89.99%
One wholesale lane reaches 89.99% LTV with no mortgage insurance. The conditions are tight. You need a 680 score and a 50% ratio ceiling. The loan must be a 30-year fixed on a primary residence with a conforming balance. It carries its own six months of seasoning. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Seasoning is the waiting period a lender wants before you refinance. This lane is worth a look when your balance is low and you need more cash than 80% allows. In Texas, a cash-out on the homestead is capped by the state constitution at the agency figure. So the wholesale lane is not written there.
FHA and VA cash-out
FHA cash-out requires that you live in the home as your principal residence. It also requires that you have owned and lived in it for a stretch before you apply. The cap sits below the conventional figure for many files. HUD publishes the rulebook, Handbook 4000.1, and lenders layer their own overlays on top.
VA cash-out is open to eligible veterans and service members. You need a Certificate of Eligibility, and you get the loan through a private lender, per VA’s cash-out loan page. A VA cash-out can replace your current loan, pull cash, or move a non-VA loan into a VA-backed one. For the full walk-through, see Lendmire’s piece How to Use a VA Cash-Out Refinance to Tap Home Equity.
Jumbo
If your new loan would exceed the conforming limit, the jumbo lanes take over. Jumbo lanes typically want a 660 decision score and cap the ratio at 50% on the fixed-rate options. Loan sizes reach $5,000,000. At a $500K home value, most borrowers stay in conforming territory. The county limit is the line that matters, and a loan officer checks it for your area.
Which Program Fits You?
Work it as an if/then path.
- You have a VA-eligible background and want cash. Start with VA cash-out. Its terms are set by VA, and you should compare them against conventional.
- You have an FHA loan today and want cash. Compare FHA cash-out against a conventional cash-out. A conventional loan may fit better if your score is solid, since mortgage insurance does not stay on at 80%.
- You want modest cash and your balance is low. Conventional at 80% likely does the job.
- You want more cash and your balance is low. Ask about the 89.99% lane. You need the 680 score and 50% ratio.
- Your goal is a lower payment, not cash. Skip cash-out. That points to the rate-and-term lane.
Many homeowners confuse the two products, so here is the difference. A rate-and-term refinance, called limited cash-out in the agency guides, goes up to 95% LTV on a one-unit primary home. It pays off your existing first mortgage and closing costs, with only incidental cash back. That is the wrong tool for pulling equity. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Where the Rules Break: Edge Cases
Most files follow the standard path. These do not.
You just bought the home. Conventional cash-out needs at least one borrower on title for six months. The loan being paid off must be at least 12 months old, measured from note date to note date, per Fannie Mae’s seasoning announcement. Freddie Mac’s guide carries the same six-month title rule. A cash buyer can use delayed financing, which lets you borrow against a home you bought with cash. Inheritance and legal-award exceptions also exist.
You have no mortgage. A loan on a home that is free and clear still counts as cash-out.
You have a second lien. A HELOC or second mortgage you are paying off reduces your cash. If you drew on a second lien for cash after buying, the refinance can be treated as full cash-out.
You want to add a co-borrower who does not live there. That does not work on FHA cash-out. Occupancy rules also apply on conventional primary-residence loans.
You live in a manufactured home. Single-width manufactured homes are not eligible for cash-out.
You have a past credit event. The agencies set waiting periods. They are 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.
You are in a state with its own rules. Some states add their own home-equity rules, and Texas is one.
What the Lender Looks At
Underwriting is the lender’s review of your file. It runs in a set order.
1. Pick the lane. Conventional, FHA, or VA. Confirm the goal is real cash back.
2. Check ownership and seasoning. Time on title and the age of your current loan.
3. Order the appraisal. Value is the base for LTV. A VA loan uses a VA appraisal.
4. Compute the ceiling. Value times the cap, minus liens and costs.
5. Review credit, income and assets. Score, debt-to-income, and reserves. Reserves are the savings left after closing. Higher ratios can trigger reserve requirements on conventional cash-out.
6. Read your disclosures. The Loan Estimate shows costs and estimated cash to close. The Closing Disclosure confirms them before you sign.
7. Close and receive funds. The old loan is paid off and the cash is disbursed. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
What decides the result: appraised value, the cap, existing liens, seasoning, occupancy, credit, ratios, and the pricing adjustments lenders apply to cash-out loans. Those adjustments make cash-out cost more than a plain rate-and-term loan.
What It Costs and What Changes
A cash-out refinance has closing costs. Costs often apply, and they are charged on the whole new loan, not just the cash portion. Depending on the terms, a cash-out may cost more or less than a HELOC.
Three effects matter.
Your balance rises. The new loan replaces the whole mortgage. A bigger balance usually means a bigger payment, even if the interest cost per dollar falls.
Your term may stretch. A cash-out refinance can extend how long it takes to pay off the mortgage, since the new loan starts a fresh repayment schedule.
Your old loan goes away. If your current loan carries terms you like, replacing it has a price. Compare that loss against what the cash lets you do.
Mortgage insurance follows leverage. Above 80% LTV it is required. You can ask to cancel it at 80% of the original value, with good payment history, no subordinate liens and no drop in value. The servicer must end it automatically at 78%. Published typical annual premiums run 0.58% to 1.86% of the balance. That is a range, not a quote. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
When Cash-Out Is the Wrong Tool
Cash-out is not the answer to every equity question. Skip it in these cases.
- You love your current loan. A HELOC or home equity loan leaves the first mortgage untouched.
- You need a small amount. Closing costs on the whole new loan can swamp a small cash draw.
- You are low on equity after appraisal. A lower-than-expected value cuts your accessible cash fast. Run a sensitivity check: take your expected value and trim it by a few percent, then redo the math.
- You only want a lower payment. FHA Streamline and VA IRRRL are built for that. An FHA Streamline refinances an existing FHA loan with no appraisal and limited credit review. A VA IRRRL refinances an existing VA loan, with a 0.5% funding fee unless you are exempt. VA says an IRRRL is for lowering your payment or moving to a fixed rate. Neither gives you cash. Both need a net tangible benefit, which means the refinance has to make you better off in a measurable way.
CFPB’s framing is blunt: converting equity into cash creates a debt you must repay. Treat the cash like any other loan.
Key Terms Defined
Loan-to-value (LTV): The new loan divided by the home’s appraised value.
Seasoning: The waiting period before you can refinance or cash out after buying or taking a loan.
Net tangible benefit: A test that a government refinance must leave you measurably better off.
Delayed financing: A cash-out exception for people who bought a home with cash and want to borrow against it soon after.
Decision score: The credit score a lender’s underwriting system uses to make its decision.
Debt-to-income (DTI): Your monthly debts as a share of your gross monthly income.
What to Gather Before You Apply
Pull together these items first.
- Your latest mortgage statement, showing the payoff balance and any second lien.
- Pay stubs, tax returns, or other income proof, depending on the program.
- Bank statements to show reserves.
- Your homeowner’s insurance information.
- Your VA Certificate of Eligibility, if you are going the VA route.
Matching the program to the file is the broker’s job. Lendmire shops wholesale cash-out refinance lenders, then places the scenario with the program that fits your property type, credit, leverage need and documents. The best program for your situation is the one that clears underwriting at the leverage you need.
Frequently Asked Questions
How much cash can I get from a $500K home?
It depends on what you owe. On a conventional loan, multiply the appraised value by 80%, then subtract your payoff, other liens, and financed closing costs. The wholesale lane reaches 89.99% if you qualify. A lower appraisal means less cash.
Can I take all of my equity out?
No. Every program leaves an equity cushion. Conventional leaves 20% on a one-unit primary home, and the wholesale lane leaves just over 10%. You can also take less than the maximum if that is all you need.
How soon after buying can I cash out?
Usually not right away. Conventional loans want a borrower on title for six months. The loan being paid off must be at least 12 months old. Delayed financing is the main exception for cash buyers. FHA also requires a stretch of ownership and occupancy.
Is a cash-out refinance better than a HELOC?
It depends on the terms and on your current mortgage. A HELOC leaves your first loan alone. A cash-out replaces it. If your existing loan is one you want to keep, a second lien may fit better, and the costs can run either way.
Can I use an FHA Streamline or VA IRRRL to get cash?
No. Both are no-cash-out products for lowering a payment on an existing government loan. If you want cash, look at the full cash-out programs.
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. Reach out at 828-256-2183 or request a quote at Lendmire’s quote page. All program figures are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
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.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
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. HUD
3. Fannie Mae Selling Guide Announcement SEL-2023-01
5. VA Interest Rate Reduction Refinance Loan page
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Should Co-Owners Use a Cash-Out Refinance Buyout or Sell the Home? · How to Get a Cash-Out Refinance After Buying a Home With Cash · High-LTV Cash-Out Refinance vs Home Equity Loan on a Primary Home
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
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.