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Ask us what cash out refinance rate we can offer you!

The cash out refinance rate we may be able to offer you depends on your credit score, income, finances, the current mortgage rate market, and other factors. Freedom Mortgage may be able to offer you a rate that is lower – or higher – than the rate you see advertised by other lenders. Ask us today what cash out refinance rate we can offer you.

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What is a cash out refinance?

A cash out refinance helps you get cash from the equity in your home. You replace your current mortgage with a new mortgage that has a higher amount and get the difference in cash at closing.

For example, say you have a mortgage with a loan balance of $150,000. A cash out refinance might let you get a new mortgage for $170,000 and $20,000 cash at closing.

You can use this money to consolidate higher interest debts, pay for college educations, or pay for home improvements. You typically have to pay closing costs with cash out refinances and you will need to meet credit, income, and financial requirements to get your application approved. Check out our cash out refinance example to learn more.

Get cash from home equity

Consolidate debts

Pay for home renovations

Pay for college educations

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Cash out refinance calculator

The amount of cash you might get from a cash out refinance depends on the value of your home’s equity and the loan-to-value ratio of your refinance. Change the default values to personalize your estimate!

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Cash out refinance calculator assumes your loan-to-value ratio is 80%. This calculator is made available as a self-help tool for your personal use. We do not guarantee its accuracy or applicability to your individual circumstances. Resulting calculations are for illustrative and informational purposes only and are not intended as investment or financial advice. Consult a qualified financial advisor before making important personal finance decisions. To get a better understanding of the benefits of refinancing, speak with a loan advisor at Freedom Mortgage.

You might qualify for $50,000

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Ask us what cash out refinance rate we can offer you!

The cash out refinance rate we may be able to offer you depends on your credit score, income, finances, the current mortgage rate market, and other factors. Freedom Mortgage may be able to offer you a rate that is lower – or higher – than the rate you see advertised by other lenders. Ask us today what cash out refinance rate we can offer you.

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Choose the cash out refinance that’s right for you!

At Freedom Mortgage, we offer cash out refinancing with conventional, VA, and FHA loans. All types of loans let you get cash from your home’s equity. VA loans might let you borrow more money from your home’s equity compared to other loans, and might have more flexible credit requirements too. See our loan comparison. Please note that FHA and VA cash out programs are not available in connection with Texas 50(a)(6) loans.

Conventional cash out refinances

  • All qualified homeowners are eligible
  • Maximum loan-to-value ratio often 80%
  • Minimum credit score often 620
  • Mortgage insurance not required with home equity 20% or more
  • No funding fee
Learn More

VA cash out refinances

  • Only qualified veterans, military personnel, and surviving spouses are eligible
  • Maximum loan-to-value ratio often 90%
  • Minimum credit score often 550
  • Mortgage insurance not required
  • Most veterans will pay a funding fee of 2.3% to 3.6% of loan amount
Learn More

FHA cash out refinances

  • All qualified homeowners are eligible
  • Maximum loan-to-value ratio often 80%
  • Minimum credit score often 550
  • Mortgage insurance required
  • No funding fee
Learn More
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What Our Customers Say

Check out the reviews from some of our customers.

Reviews and comments have been submitted by customers voluntarily and are solely their views. Customers were not compensated for their reviews/comments but were informed that they may be used in Freedom Mortgage Corporation marketing. Customer experiences are not meant to suggest future performance and may not be representative of your experience.

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Cash out refinance fees and requirements

To get a cash out refinance, you need a substantial amount of equity in your home which lenders often measure using a loan-to-value ratio (LTV). You also need to meet your lender’s credit, income, and financial standards to get your application approved. Here’s what else you need to know about cash out refinancing.

New application and documentation

You will need to complete a new application and provide income and financial documents like current pay statements and tax returns to apply for a cash out refinance.

New home appraisal

You will probably need a new appraisal to estimate your home’s fair market value. This appraisal will help determine how much home equity you have and how much cash you may be able to borrow against it. A home appraisal typically costs $300 to $400. Learn about home appraisals

Loan-to-value ratio

Your loan-to-value ratio (LTV) also helps determine how much cash you may be able to borrow against the value of your home’s equity. The maximum LTV for many cash out refinances is 80%. Learn about cash out LTVs

New credit check

We will probably check your credit score before we approve your loan. 620 is often the minimum credit score needed for a cash out refinance. A higher credit score might help you get a lower interest rate. Learn about cash out credit scores

Closing costs

Closing costs for cash out refinancing can include lender fees, discount points, recording fees, and more. You may need to pay property taxes and homeowners insurance costs too. Forbes estimates cash out refinance closing costs average between 2% and 6% of the loan amount. Learn about closing costs

Loan disclosures and closing

Once you submit your application, you will need to review and sign Loan Disclosures. You'll also need to attend the closing of your new mortgage with cash out refinances.Learn about loan disclosures

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A cash out refinance is a way of borrowing money against your home’s equity. A cash out refinance replaces your existing mortgage with a new mortgage for a higher amount and you receive the difference in cash when the new mortgage closes. For example, if you have a $150,000 balance on your mortgage and a substantial amount of home equity, you could refinance to a $200,000 mortgage and get $50,000 in cash.

You’ll have to complete an application and provide credit, income, and financial documents to get a cash out refinance. You’ll need to review and sign loan disclosures and attend the closing of your new mortgage and pay closing costs too.

In addition to equity in your home, you’ll need to meet your lender’s cash out refinance LTV requirement in order to qualify. LTV helps determine how much cash you may be able to get as a part of your refinance. Since LTV is calculated with the appraised value of your home, you will likely need a new home appraisal to determine the current value of your home.

Keep in mind that you will increase the amount of money you owe on your mortgage with a cash out refinance. This means you may pay more in interest over the life of your new mortgage. A cash out refinance may also increase the number of years you are paying back your mortgage, which can also increase the amount of money you pay in interest. Learn more about the cash out refinance process.

The biggest benefit of a cash out refinance is that it can give you money to pay for important investments. Some homeowners use the money from a cash out refinance to pay for college or for home improvements which may increase their house's value.

You can also use cash out refinances to consolidate debts. The interest rate on a mortgage can be lower than rates on other types of loans such as credit cards. When the interest rate on a cash out refinance is significantly lower than the rate you are currently paying on other debt, it may make sense to borrow against the value of your home’s equity to pay down other loans and save on interest payments.

When you have a lot of equity in your home, a cash out refinance might give you access to a substantial amount of money. Cash out refinances can have competitive interest rates compared to other kinds of unsecured loans. Because new mortgages often have terms between 15 and 30 years, cash out refinances can give you a long time to pay the loan back too. Learn more about the pros and cons of cash out refinances.

The amount of cash you can get from a cash out refinance depends on the value of your home’s equity and the refinance’s loan-to-value ratio (which is often 80%). Take a look at this sample calculation:

Home Value $275,000
Current mortgage balance $125,000
Sample maximum LTV 0.8 or 80%
Maximum new mortgage balance $220,000 ($275,000 x 0.8)
Maximum cash available $95,000 ($220,000 - $125,000)

In this example, the maximum LTV is 80%. This means the new mortgage balance can be no more than 80% of the value of the home which in this case is $220,000. Because the homeowner in this example has a large amount of home equity, they may be able to refinance and get up to $95,000 in cash.

You can use the cash out refinance calculator on this page to estimate the amount of cash you might be able to get from your home’s equity.

Since the money from a cash out refinance is a loan, you do not have to pay income taxes on it. Getting a cash out refinance may benefit your tax deductions at the end of the year. Consult a tax advisor about the deductibility of mortgage interest. Learn more about the tax implications of cash out refinances.

  • Substantial home equity requirement

To get a cash out refinance, you need a substantial amount of home equity. You typically build equity in your home by paying down your mortgage principal or when the value of your home increases. To estimate your home’s equity, take the current value of your home and subtract from it the amount of your mortgage principal. For example, if your home is worth $250,000 and you owe $150,000 on your mortgage, you have $100,000 in home equity.

  • An acceptable loan-to-value ratio (LTV) requirement

Your loan-to-value ratio plays an important role in determining how much money you can borrow with a cash out refinance. Loan-to-value ratio is the percentage you get when you divide your mortgage amount by the value of your home. For example, if your home is currently worth $250,000 and you owe $150,000 on your mortgage then your LTV is 60%. ($150,000 ÷ $250,000 = 0.6 or 60%.) You typically can’t borrow the full amount of the equity in your home with conventional cash out refinances. You can only borrow a portion of it depending on the maximum loan-to-value ratio, which is often 80%. Look at this sample calculation.

Home Value $275,000
Current mortgage balance $125,000
Sample maximum LTV 0.8 or 80%
Maximum new mortgage balance $220,000 ($275,000 x 0.8)
Maximum cash available $95,000 ($220,000 - $125,000)

Remember you typically have to pay closing costs when you refinance. If you add these costs to your loan amount, they will reduce the amount you will be able to borrow. For example, pretend the loan calculation above comes with $6,000 in closing costs which you add to your mortgage principal. These costs will reduce the maximum cash available to $44,000.

  • Good credit and finances requirement

You typically need a good credit score, income, and finances to get your application for a cash out refinance approved. Having a lower loan-to-value ratio can also help you get approved, because lenders often see homeowners with lower LTVs as desirable customers. Good credit, income, and finances might help you earn a lower interest rate too.

  • Closing costs requirement

You will most likely need to pay closing costs when you get a cash out refinance. These can average between 2% and 6% of the full loan amount according to Forbes. This means you might pay between $4,000 and $12,000 in closing costs if your new loan amount is $200,000.

  • Different requirements for investment houses

It’s possible to get cash from the equity in an investment or rental house. However, the requirements for these types of houses are different than the requirements for a house in which you live. Learn more about cash out refinances for investment and rental properties.

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The Freedom Mortgage Difference

We are committed to making you a life-long customer with exceptional mortgages and exceptional service!

We’ll help you choose the right mortgage and work with you to make buying a home or refinancing easy. We'll also keep an eye on your rate and let you know when you can lower your payment or get cash from your home's equity.

We are thankful for our 1.5 million customers. It’s because of homeowners like you that we’ve grown over the past 30 years to become one of the top lenders in America.

We are proud to support veterans and service members with charitable work like raising $93,000 to buy school supplies for military families. We are also committed to fighting hunger in communities across the nation.