Cash Out Refinance

Access your home equity while refinancing your mortgage

Minimum Credit Score

620+

Down Payment

N/A

Typical Timeline

30 Days

Overview

A cash-out refinance allows you to refinance your existing mortgage for more than you currently owe and receive the difference in cash. This powerful financial tool lets you tap into your home's equity to fund home improvements, consolidate high-interest debt, pay for education, or cover other major expenses.

With a cash-out refinance, you're replacing your current mortgage with a new, larger loan. The difference between your old loan balance and the new loan amount is paid to you in cash at closing. This can be an attractive option when you have significant equity in your home and need access to funds at mortgage interest rates, which are typically much lower than credit cards or personal loans.

Key Benefits

Access home equity at mortgage interest rates
Consolidate high-interest debt
Fund home improvements that add value
Pay for education or major expenses
Potentially tax-deductible interest (consult tax advisor)
Single monthly payment instead of multiple debts
May improve credit score by reducing credit utilization

Who Qualifies?

Homeowners who have built significant equity
Borrowers needing to consolidate high-interest credit card debt
Those looking to fund renovations or investment property purchases

Requirements

Minimum 20% equity remaining after cash-out
Credit score typically 620 or higher
Debt-to-income ratio generally below 43%
Stable income and employment history
Property appraisal required
Closing costs apply (can sometimes be financed)
Maximum cash-out typically 80% of home value

Pros & Cons

Advantages

Provides a massive lump sum of cash at mortgage interest rates (much cheaper than personal loans)
Consolidating debt can dramatically lower your total monthly financial obligations and improve your credit score
Interest may be tax deductible if the cash is used to improve the home

Drawbacks

Increases the total debt owed on your home and resets the clock on your loan
Closing costs are assessed on the entire new loan amount
If you already have a very low rate, you lose it on the entire balance

What to Expect

Goal Assessment: Let us know exactly how much cash you need. We will pull comps to see if your home appraises high enough to get it.

Appraisal: A full interior/exterior appraisal is almost always required for cash-out.

Three-Day Rule: By law, for primary residences, you must wait 3 business days after closing before the funds are dispersed.

Compare Loan Options

vs. HELOC (Home Equity Line of Credit)

A HELOC acts like a credit card tied to your house; it keeps your original low-rate 1st mortgage intact but has an adjustable rate. Cash-Out replaces the whole loan with a new fixed rate.