The Quick Read: Usually about 80% of your home’s appraised value, minus everything the new loan has to cover first. On a conventional loan, 80% is the standard ceiling for a one-unit primary residence, with one narrow wholesale lane that reaches higher. Your current payoff, closing costs and any financed fees come out of that ceiling, and what remains is your cash. Other occupancies and unit counts sit under a lower cap.
What Number Actually Decides Your Cash?
Your cash equals the program’s maximum loan, minus your payoff and costs. The maximum loan is the appraised value times the LTV cap. LTV, or loan-to-value, is your total loan divided by your home’s value. Your current balance matters only because the new loan must pay it off first.
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.
Here is the formula in plain steps:
1. Take the appraised value.
2. Multiply by the maximum LTV for your program and property.
3. Subtract your existing first-mortgage payoff.
4. Subtract closing costs and any fees you roll into the loan.
5. What is left is the cash you can take.
This is general arithmetic, not a quote. Across the wholesale programs Lendmire places files with, the conventional cash-out cap is 80% LTV on a one-unit principal residence. It is 75% on two- to four-unit principal residences, second homes and investment property. Occupancy sets the leverage. Every figure here is subject to lender guidelines and full file review.
Picture a one-unit primary home that appraises at a round 100 units of value. At 80%, the new loan can reach 80 units. If you owe 50 units, and costs and financed fees take 3 units, you walk away with 27. Not 30. Not 50. The gap between “equity” and “cash” is where most surprises live.
Lendmire’s cash-out refinance programs page lays out the programs a broker can place for a homeowner in the 16 states where Lendmire does consumer lending.
Why Can’t You Take All of Your Equity?
Because the cap applies to the whole new loan, not just the cash. The lender wants a cushion. At 80% LTV, you keep at least 20% of the home’s value as equity. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
That matches the general guidance in the federal consumer-finance regulator’s home equity guide, which says lenders typically want you to keep roughly 10 to 20 percent of your home’s value as equity. Program caps are the hard rule. That guidance is the general picture.
Two common misreadings are worth clearing up:
- “The cap is my cash.” No. The cap covers the entire new loan, including the payoff.
- “Paper equity is spendable equity.” No. Only the part below the cap, after payoff and costs, is tappable.
Consider a home worth far more than you owe on it, where you also carry a large second lien. In most cases the new loan has to pay that lien off too. Your cash shrinks accordingly.
How Do the Limits Change by Loan Type?
Conventional is the baseline, and occupancy moves the cap. The table shows the conventional cash-out caps across the wholesale programs Lendmire places files with. Government loans work differently, and the next paragraphs explain how.
| Property and occupancy | Conventional cash-out cap |
|---|---|
| One-unit primary residence | 80% LTV |
| Two- to four-unit primary residence | 75% LTV |
| Second home | 75% LTV |
| Investment property | 75% LTV |
| Texas homestead (Section 50(a)(6)) | 80% LTV |
Texas is a special case. A cash-out on a Texas homestead falls under the state constitution’s Section 50(a)(6) and is capped at 80% of the home’s value. State-law exceptions like this exist, so a homeowner in any state should ask what overlays apply.
FHA and VA. The FHA publishes its rules in HUD Handbook 4000.1. FHA cash-out is for owner-occupied principal residences. The FHA Streamline is a different tool: it refinances an existing FHA loan and is not a cash-out product.
The VA describes its cash-out option on its cash-out refinance page. You need a Certificate of Eligibility, you must live in the home, and a private lender orders the appraisal. VA allows much higher leverage than conventional, but individual lenders set their own limits. The VA also charges a one-time funding fee unless you are exempt, and it can be financed. The VA IRRRL is a VA-to-VA rate-reduction loan, not a cash-out loan.
What Shrinks Your Number?
Five things: the appraisal, existing liens, financed costs, credit and income, and reserves. Each one either lowers the ceiling or eats into what sits under it.
The appraisal. Value is the denominator for LTV. A lower appraisal lowers the maximum loan one-for-one at your cap. If your home appraises at 95% of what you expected, your ceiling drops by the same proportion, but your payoff does not. Cash falls faster than value does. That is how a modest appraisal miss turns into a big cash miss.
Existing liens. The new loan pays off your first mortgage. A second lien or HELOC usually has to be dealt with too, and it reduces your cash.
Financed costs. Closing costs and fees you roll into the loan count against the cap. Financing them keeps cash out of your pocket at closing, but it shrinks your net proceeds.
Credit and income. The wholesale conventional programs start at a 620 decision score, and the automated underwriting finding governs most files. The total debt ratio ceiling is 50%. Manually underwritten loans use 36% or 45%, depending on the reserve and score factors in the Eligibility Matrix. A weaker file can mean a lower cap or no approval.
Reserves. On cash-out loans, the Fannie Mae Eligibility Matrix calls for minimum reserves when the automated case file’s debt ratio exceeds 45%. Reserves are money left in the bank after closing. Plan for that.
Do You Have to Own the Home for a Certain Time?
Yes. The rules are about how long the loan and the title have existed. Across the wholesale programs Lendmire places, the first mortgage being paid off must be at least 12 months old, measured note date to note date. At least one borrower must also have been on title for 6 months, with exceptions for delayed financing, inheritance and legal awards.
A cash-out refinance, in plain terms, is a mortgage with no specific restrictions on how you use the proceeds.
It covers a point many owners miss. If you own your home free and clear, a new loan on it is still treated as cash-out. No payoff does not make it a rate-and-term loan.
Is There a Way to Pass the 80% Line?
One wholesale lane does, under narrow conditions. On the agency path, mortgage insurance is required above 80% LTV, and this no-mortgage-insurance cash-out lane is the exception. Mortgage insurance can be cancelled at 80% of the original value on request, and the servicer must end it at 78% under federal law.
The lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score, a 50% ratio, a thirty-year fixed rate, a primary residence and a conforming loan balance. It carries its own six months of seasoning. It is not written in Texas. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Not every borrower fits, and not every file clears. When it does fit, it is the one place the usual 80% ceiling gives way. Treat it as a possibility for a stronger file, not a promise.
What Does a Cash-Out Do to Your Monthly Budget?
It replaces your loan with a bigger one, so your payment may rise and your payoff may stretch out. The CFPB’s home equity guide makes that point as well. You are not borrowing on top of your loan. You are swapping it.
That swap is the real decision. If your current loan carries terms you like, a larger replacement loan resets them. Weigh three things before you pick an amount:
- The loan you are giving up. Its terms may be better than what a new loan offers. Compare before you trade.
- The size of the draw. Taking the maximum is a choice, not a requirement. A smaller draw leaves a bigger equity cushion if prices dip.
- The purpose. Paying off higher-cost debt or funding a repair is different from a purchase you could delay.
The cash can help, and the habits you keep afterward matter just as much.
Compare the cash-out against other ways to tap equity, such as a HELOC or a home equity loan. Those add a second lien and leave your first mortgage alone. A cash-out replaces the first mortgage entirely. Which one fits depends on how the terms of your existing loan stack up.
How Is This Different From a Rate-and-Term Refinance?
A rate-and-term refinance gives you only incidental cash. It changes your rate or term, and the new loan pays off your first mortgage, closing costs and any purchase-money second lien. It is a different loan from a cash-out.
The limits on cash back are specific. Fannie Mae allows the lesser of 2% of the new loan or $2,000.
The leverage is higher on rate-and-term: 95% LTV on a one-unit principal residence. If you only need a better loan and no cash, it is the cleaner path. If you need real cash, it is the wrong tool. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Key Terms Defined
LTV (loan-to-value): Your loan balance divided by your home’s appraised value, shown as a percentage.
Appraised value: The home’s value as estimated by a licensed appraiser, which sets the LTV math.
Seasoning: The minimum time a loan or ownership must have existed before you can refinance with cash out.
Mortgage insurance: Coverage the borrower pays for that protects the lender when LTV is above 80%.
Reserves: Money in the bank after closing, kept as a cushion for the loan.
Free and clear: A home with no mortgage on it.
Can You Change Your Mind After Signing?
Yes, for a refinance on your principal home. You generally have until midnight of the third business day to cancel. The CFPB explains that the clock starts after you sign and receive the required notices. Saturdays count as business days. Sundays and legal public holidays do not.
If you cancel, you still owe your original loan. Missing or defective disclosures can extend the right to up to three years.
Know this before closing, because the cash is not yours to spend until the window passes.
Frequently Asked Questions
Can I take cash out of a home I own free and clear?
Yes. A new loan on a home with no mortgage is treated as cash-out. The same LTV cap applies to your occupancy and property type, and since there is no payoff, more of the ceiling becomes cash. Closing costs and fees still come out first.
What if my appraisal comes in lower than I hoped?
Your maximum loan drops, and your cash drops faster. The cap applies to the lower value, while your payoff stays the same. You can take a smaller draw, wait and reappraise later, or reconsider the refinance. Run the formula again with the new value before you decide.
Does a cash-out refinance require mortgage insurance?
Above 80% LTV on the agency path, yes, except in the wholesale no-mortgage-insurance cash-out lane described above. At the standard 80% conventional cap, most borrowers are right at the line. Insurance can be requested off at 80% of original value and must end at 78%.
Can I cash out an investment property or second home?
Yes, but the cap is lower. Occupancy sets leverage, so second homes and investment property cap at 75% on conventional cash-out, versus 80% for a one-unit primary residence.
Can a VA Streamline or FHA Streamline give me cash?
No. Both are streamlines for an existing government loan. The VA IRRRL is VA-to-VA and the FHA Streamline is FHA-to-FHA. Neither is built to hand you cash.
Where This Leaves You
Your cash comes down to four numbers: appraised value, your program’s cap, your payoff, and your costs. Run them in that order. 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. Everything above 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
2. HUD Housing Handbooks (Handbook 4000.1)
3. VA.gov Cash-Out Refinance Loan
4. Fannie Mae Eligibility Matrix
5. CFPB: How Long Do I Have to Rescind When Does the Right of Rescission Start
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 Much a Cash-Out Refinance Can Lend Toward Your Next Home · Cash-Out Refinance vs Home Equity Loan to Buy Another House · Does a Fourplex Cash-Out Refinance Release as Much Equity as a Duplex?
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
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.