What rules apply to a cash-out refinance?
The short answer
Conventional and FHA cash-out loans go up to 80% of your home’s value, and VA can go higher for eligible veterans. Conventional requires at least 6 months on title, and the mortgage being paid off must be at least 12 months old; FHA requires 12 months of owner-occupancy and on-time payments. Your credit, income and the new payment still have to qualify.
Refinance & equity
Cash-out eligibility depends on equity, ownership and mortgage seasoning, credit, income, property type, and the selected program’s requirements.
Official source: Fannie Mae — Cash-Out Refinance Transactions ↗
Published · Updated · Sources checkedPublished by Mortgage Lending Group LLC. Editorial standards
Leer esta respuesta en español →
Ownership and mortgage age are separate
Fannie Mae generally requires at least one borrower to have held title for six months and an existing first mortgage being paid off to be at least 12 months old. Exceptions apply; ask the lender to check the complete rule. Fannie Mae — Cash-Out Refinance Transactions ↗
Equity is not the same as cash available
The permitted loan amount must leave room for required equity, existing payoffs, and transaction costs. A home-value estimate does not establish an appraised value or the maximum financing ratio for your transaction.
Compare alternatives before replacing your first loan
Look at the cost of replacing the entire mortgage as well as the extra cash. Compare a HELOC or other appropriate alternatives on payment, rate changes, fees, and repayment term. Ask how much money would actually reach you at closing.
Put it into perspective
An example, not an offer
Illustration only: a hypothetical $500,000 new loan minus a $430,000 payoff and $10,000 in financed costs leaves $60,000. This arithmetic does not imply that a $500,000 loan is available or appropriate.
Compare equity scenarios →Related questions
Check the original guidance
Requirements and availability can change. Confirm the program and lender terms for your application.
Educational information, not individualized advice, a quote, commitment, or approval. Examples are hypothetical. Naming a mortgage professional as a contact does not imply personal review of this article.
Owner & Mortgage Broker · NMLS #131435 · Mortgage Lending Group LLC, NMLS #1157983
In mortgages since 2005. English and Spanish.
See how much cash you can take out
Or call or text a licensed loan officer at (206) 861-5626.
Uses your microphone. Clara is an AI, not a person.