The Quick Read: On a conventional loan, most lenders cap a cash-out refinance on a one-unit primary home at 80% of the appraised value. The cap is 75% on a two- to four-unit primary home. Two clocks also run: you generally need to be on title for six months, and the mortgage you are paying off must be at least 12 months old. Exceptions exist, all subject to lender guidelines and full file review.
Key Terms Defined
Cash-out refinance: A new mortgage that pays off your current loan and gives you the extra equity as cash.
LTV (loan-to-value): The new loan amount divided by the home’s appraised value, shown as a percentage.
Seasoning: The waiting period a lender requires before you can refinance, measured from a set starting event.
Note date: The date you sign the loan’s promissory note. Lenders often count loan age from this date.
Delayed financing: A conventional exception that lets someone who bought with cash take a cash-out loan without the usual title wait.
Limited cash-out (rate-and-term) refinance: A refinance that pays off the existing first mortgage and closing costs, with only a small amount of incidental cash back.
Cancellation: The short right-to-cancel period on a refinance of your home, during which funds are not released.
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: 7.32% as of October 22, 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.
How Much Can You Take Out?
You can take out up to the program’s LTV cap, minus everything that has to be paid first. That is the whole idea. The cap applies to the total new loan, not to the cash you receive.
Across the wholesale programs Lendmire places files with, the conventional cash-out cap on a one-unit primary residence is 80% LTV. For a two- to four-unit primary residence, a second home, or an investment property, it drops to 75%. Fannie Mae’s Eligibility Matrix is the published table behind these caps, and it shows different limits by occupancy. This article covers primary homes only. Occupancy decides leverage, so a second home or rental follows a different table. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
A wholesale lane also reaches 89.99% LTV with no mortgage insurance. It requires a 680 score, a 50% ratio ceiling, a thirty-year fixed rate, a primary residence, a conforming balance, and its own six months of seasoning. It is not a universal option. In Texas, a cash-out on the homestead is capped by the state constitution at the agency figure, and that wholesale lane is not written there. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
The formula
Here is the math in words:
1. Take the appraised value.
2. Multiply it by the program’s LTV cap. That is your maximum new loan.
3. Subtract the payoff on your current first mortgage.
4. Subtract any other liens you must clear.
5. Subtract closing costs that come out of the loan.
6. What remains is your cash.
Picture a home where the lender caps the loan at 80%. If the existing mortgage already sits at 60% of the value, the gap before costs is 20% of the value. Costs then shave that down. The maximum is rarely the amount in your hand.
Appraisal drives all of it. A low appraisal shrinks the maximum loan, and the cash shrinks with it. Your own opinion of the home’s value doesn’t count here.
The Two Clocks: Title and Loan Age
There is no single waiting period. Conventional cash-out loans run two separate clocks, and you must satisfy both.
| Clock | What starts it | Typical conventional rule |
|---|---|---|
| Title seasoning | Date you went on title | 6 months |
| Loan age | Note date of the loan being paid off | At least 12 months old |
| Delayed financing | Cash purchase | Waives the title wait |
For delayed financing purchases, Fannie Mae measures from the purchase date to the disbursement date of the new loan.
Many people blur these two. A borrower can satisfy one and miss the other. Say you bought with a mortgage nine months ago. Your title clock is done, but your existing loan is only nine months old, so the loan-age clock has not finished.
Worked Timelines
Use one sample home in four situations. No dollar figures are needed.
The financed buyer. You buy with a mortgage and move in. At month six, the title clock is met. The loan-age clock is not. Month twelve is the earliest the loan is old enough for a conventional cash-out, assuming the equity and the appraisal are there.
The cash buyer. You pay cash for the home. Normally the six-month title wait would block a cash-out loan. Delayed financing removes that wait. Fannie Mae’s cash-out section requires that the original purchase was an arm’s-length transaction and that you meet general borrower eligibility. In our files, lenders also want proof that the cash purchase involved no mortgage financing and that the funds are documented. Treat those extra conditions as lender-specific and confirm them.
The inheritor. You inherit a home and move in. Fannie Mae’s limited cash-out section lists exceptions to the usual waiting period, including a divorce award and a revocable-trust beneficiary, when the lender documents them.
The repeat borrower. You already did a cash-out loan and want another. The loan-age clock restarts with the new note, so you wait until that new loan is old enough. Some lenders add their own overlays beyond the program minimum.
Where the General Rule Breaks
Delayed financing waives the clock, not the limit. The loan is still a cash-out refinance. The 80% cap and cash-out pricing still apply. It is not a way around the cap.
Streamlines are not cash-out tools. The FHA Streamline and VA IRRRL are for existing government loans. HUD describes the FHA Streamline as a refinance with limited credit documentation and underwriting that must show a net tangible benefit. Net tangible benefit means the new loan must leave you measurably better off. Neither product puts meaningful cash in your hand. The VA IRRRL carries seasoning of the later of 210 days and 6 payments, a 0.5% funding fee unless you are exempt, and no VA appraisal. For FHA and VA cash-out specifically, the waiting periods and caps are their own, and a loan officer should confirm the current rules for you.
LLCs and trusts. On a limited cash-out loan, a borrower who is obligated on the loan but not on title, such as through an LLC they own, must have ownership transferred to them personally. Check this before you apply.
Loan type matters. Jumbo loans run on their own lane above the conforming limit.
Manufactured homes and special programs. Fannie Mae’s matrix limits single-width manufactured homes to purchase and limited cash-out refinances. The High LTV Refinance option requires that Fannie Mae already own your loan.
Limited Cash-Out vs. Cash-Out
A limited cash-out refinance is a different product, and it is usually capped at higher leverage. Across the wholesale programs, the limited cash-out loan reaches 95% LTV on a one-unit primary home, and 97% where the existing loan is agency-owned and a first-time-buyer program allows it. Mortgage insurance applies above 80% LTV. It cancels on request at 80% of original value, with good payment history and no decline in value, and ends automatically at 78%.
The trap is the debt payoff. Clearing a second lien that did not fund the purchase can convert the loan to cash-out. Paying off credit cards through the new loan does the same. If you only need a better term, ask the loan officer to compare both structures on your file. That conversation is cheap and often useful.
What Happens After You Apply
1. Classification. The lender decides whether the loan is cash-out or limited cash-out.
2. Title check. The lender verifies your recorded ownership date and any exception.
3. Appraisal. The value sets the maximum loan.
4. Payoffs. Statements for your first mortgage and any other liens come off the top.
5. Underwriting. Income, assets, credit and debt ratios are reviewed. On the wholesale conventional programs, the decision score starts at 620, the automated finding governs most files, and the total ratio ceiling is 50%.
6. Disclosures. You receive a Loan Estimate and, before closing, a Closing Disclosure. The CFPB’s Loan Estimate guide shows how cash to close is laid out. Compare the two documents and ask the lender to explain any significant change in costs.
7. Signing and the right-to-cancel pause. After you sign on a refinance of your home, a short rescission window runs before funds are released. Many borrowers mean this when they ask about a “waiting period.”
Costs often come out of the loan itself. That is why your check is smaller than the gap between the cap and your payoff. Cash-out also replaces your whole mortgage, so the balance usually rises, and your payment and total interest can rise with it.
Credit events carry their own agency waits: 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.
Myths That Cost Borrowers Time
“Every refinance has the same waiting period.” Not true. Conventional cash-out uses title and loan-age clocks. The streamlines use payment-and-time tests.
“Delayed financing lets me skip the cash-out rules.” It skips the title wait only.
“A streamline is a simpler refinance.” “Streamline” describes documentation and underwriting, and it does not change whether a refinance has costs. Costs are still built into the balance or the loan terms.
“The cap applies to my current balance.” It applies to appraised value, and the new loan amount includes any financed costs.
“A limited cash-out loan can pay off any debt.” Some payoffs convert it to cash-out.
Can’t Wait, or Not Enough Equity?
You have three honest paths.
- Wait. If one clock is short by a few months, waiting may cost less than a workaround.
- Limited cash-out. If your real goal is a different rate or term, this may reach higher leverage than cash-out.
- A home equity loan or line. These leave your first mortgage alone. They add a second payment, though, and the right choice depends on the loan you already have.
If you hold an FHA or VA loan and want only a lower payment or term, the streamlines may fit better than cash-out. If you want a deeper look at how conventional leverage works, see Lendmire’s piece Conventional Cash-Out Refinance LTV Limits for a Primary Home. Lenders can also set overlays stricter than the program minimum, so the practical limit can sit below the published one.
Quick Eligibility Checklist
- Is the home your primary residence?
- Have you been on title for six months, or does an exception apply?
- Is the loan you are paying off at least 12 months old?
- Does the appraisal support the cash you want after payoffs and costs?
- Is your score at least 620, with a total ratio the lender can accept?
- Is a state rule, such as the Texas homestead cap, in play?
Lendmire arranges these loans through wholesale lenders as a mortgage broker. The brokerage’s cash-out refinance programs cover several of the paths above, and every program figure is subject to lender guidelines and full file review.
Frequently Asked Questions
How soon after buying a home can I do a cash-out refinance?
Usually six months on title for a conventional loan, plus the loan you are paying off must be at least 12 months old. A cash purchase can use delayed financing instead. Lenders can add stricter overlays.
Does a cash-out loan on a paid-off home count as cash-out?
Yes. Taking money out against a home with no mortgage is still a cash-out refinance. Delayed financing treats a recent cash buyer the same way, with the title wait waived but the cap and pricing unchanged.
Can I take cash out of an FHA Streamline or VA IRRRL?
No. Both are streamline products for existing government-backed loans. They require a net tangible benefit and do not deliver meaningful cash. A borrower who wants cash needs a full cash-out product.
Does the 80% limit apply to my balance or my home’s value?
Your home’s appraised value. The new loan, including financed costs, must fit under the cap. Payoffs and costs come out before you see cash.
Do state laws change these limits?
Sometimes. In Texas, a cash-out on the homestead is capped by the state constitution at the agency figure. Other states have their own rules, and guidelines change, so confirm current limits with your loan officer.
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.
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 broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Eligibility Matrix
2. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
3. HUD, Streamline Refinance Your Mortgage
4. CFPB, Loan Estimate Explainer
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Cash-Out Refinance vs HELOC to Combine a First and Second Mortgage · Refinance Now and Again Later vs One Refinance After Waiting · How Much a Refinance Lends on a 2-4 Unit Primary Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.