Cash-Out Refinance
A cash-out refinance replaces your current mortgage with a new, larger one and hands you the difference in cash at closing - tax-free, because it is borrowed money, not income. The whole decision turns on two numbers: how much equity you can tap (usually up to 80% of your home's value, and up to 100% for eligible veterans), and whether resetting your first mortgage is worth it. A veteran-owned broker runs both before you commit.
NMLS #1281448 · Company NMLS #1728740
Cash-out vs rate-and-term: the one distinction that decides everything
Every refinance falls into one of two buckets, and which one you are in changes the rules, the cost, and whether it is even a good idea. A rate-and-term refinance swaps your existing loan for a new one of roughly the same balance to change your rate or your payoff timeline; you walk away with no money, just better terms. A cash-out refinance deliberately writes a new loan that is larger than what you owe, pays off the old mortgage, and gives you the gap in cash. You are converting equity you already built into spendable money without selling the house.
The cash is not taxed, because the IRS treats it as a loan, not income. But there is a real catch the headline never mentions: a cash-out refinance retires your old first mortgage and starts a brand-new one on the entire balance, at today's terms. If you locked a low rate a few years ago, that rate is gone. That single fact is why, for many homeowners, the smarter move is to leave the first mortgage alone and borrow against equity a different way. We walk through exactly when each path wins below.
Because Home Loans Inc is a veteran-owned broker rather than a single bank, we shop your cash-out file across a wholesale network of more than 50 lenders on one application, so the terms you are quoted are competed for rather than dictated by one lender's pricing sheet.
Maximum cash-out by loan program
How much equity you can convert to cash is capped by the program's loan-to-value (LTV) limit - the new loan amount divided by the home's appraised value. The home is always re-appraised for a cash-out, because the lender is lending against today's value, not what you paid.
| Program | Typical max cash-out LTV | What to know |
|---|---|---|
| Conventional | Up to 80% of value | The mainstream option. You must keep at least 20% equity in the home after the cash-out. |
| FHA | Up to 80% of value | Same 80% ceiling, but FHA adds mortgage insurance for the life of most loans, so it usually only makes sense if credit or equity rules you out of conventional. |
| VA (eligible veterans) | Up to 100% of value | The genuine standout: eligible veterans can tap up to 100% of the home's value. A one-time VA funding fee applies (commonly 2.15% first use, 3.3% subsequent use) and is waived for veterans with a service-connected disability rating. |
That VA 100% figure is not marketing. Conventional and FHA both stop at 80%, leaving a fifth of your equity untouchable; an eligible veteran can convert nearly all of it. The trade is the funding fee, which can be rolled into the loan, and which we always quote against the extra cash you unlock so you can see the real net. Many lenders apply their own overlay and cap VA cash-out below 100%, which is exactly where shopping more than 50 lenders pays off - we find the ones that go to the program's true limit.
One application, more than 50 lenders competing for your cash-out terms.
A worked example: turning equity into cash at 80% LTV
Numbers make this concrete. Take a home that appraises at $400,000 with $220,000 still owed on the current mortgage. On a conventional 80% LTV cash-out, here is exactly how the cash available is calculated.
| Appraised home value | $400,000 |
| Max new loan at 80% LTV ($400,000 × 0.80) | $320,000 |
| Pay off current mortgage balance | − $220,000 |
| Cash available before closing costs | $100,000 |
The new loan is $320,000. Of that, $220,000 clears the old mortgage and roughly $100,000 comes to you, minus closing costs and any prepaid items, which are typically netted out of the proceeds rather than paid out of pocket. Now run the same home for an eligible veteran at 100% LTV: the new loan can be up to $400,000, leaving roughly $180,000 in accessible equity before the funding fee and costs - $80,000 more than the conventional path, purely because of the higher LTV ceiling. The actual figures move with your appraisal, credit, and program, which is why we build your specific numbers before you decide. We quote the structure, never a rate, on this page by design.
Common reasons homeowners cash out
Home improvement
Funding a renovation or addition with your own equity, often at first-mortgage terms rather than a higher-cost personal loan, and reinvesting the money back into the asset.
Debt consolidation
Rolling high-interest credit cards or other debt into one secured payment. It can lower the blended cost of what you owe, but it moves unsecured debt onto your home - we model whether it truly helps. See debt consolidation refinance.
Investment property down payment
Pulling equity from your primary residence to fund the down payment on a rental or second home, putting otherwise idle equity to work.
Large one-time expenses
Tuition, a medical event, or another major cost where home equity is a lower-cost source than unsecured borrowing.
Buying out co-owners
Refinancing to pay a partner or heir for their share of a property and take sole ownership in a single transaction.
Building a cash reserve
Some borrowers cash out to hold a liquidity cushion. We are candid when that does not justify resetting a low first mortgage.
When a cash-out beats a HELOC or home equity loan, and when it does not
This is the single most important section on the page, and it is where a lot of homeowners get talked into the wrong product. The deciding factor is the rate on your current first mortgage.
Our job as a broker is to run both scenarios side by side in real dollars and tell you which is cheaper over the time you plan to keep the home - even when the answer is the product that pays us less. If your first mortgage rate is low, we will usually point you to a HELOC or home equity loan rather than a cash-out. That is the difference between a broker and a sales desk.
Seasoning, ownership, and equity requirements
A cash-out is not instant the day after you buy. Lenders enforce seasoning and ownership rules so you are tapping real, established equity. The specifics vary by program:
| Requirement | How it typically works |
|---|---|
| Ownership / occupancy | Conventional and FHA generally want you to have owned and lived in the home for at least 6 to 12 months before a cash-out. FHA requires it as your primary residence for 12 months. |
| First-mortgage seasoning | The loan being paid off is usually expected to be at least 12 months old for a conventional cash-out. |
| VA payment history | If you are refinancing an existing VA loan, expect at least 6 consecutive monthly payments and 210 days since your first payment. There is no VA seasoning hurdle when converting a non-VA loan into a VA cash-out. |
| Equity cushion | Because conventional and FHA cap at 80% LTV, you need enough equity that 80% of value still exceeds your payoff plus the cash you want - the worked example above shows the arithmetic. |
Underwriting also looks at your credit, debt-to-income ratio, and the appraisal. We pre-screen all of it so a deal does not surface a surprise late. Want to confirm where you stand first? Start with a mortgage pre-approval.
Why shop a cash-out through a broker
More than 50 lenders, one application
A single bank shows you a single bank's cash-out pricing and LTV overlays. We put your file in front of a wholesale network and let them compete for it, which matters most on VA cash-out where lender caps vary widely.
See refinance options →We run cash-out vs second-lien for you
Before you reset a low first mortgage, we model a cash-out against a HELOC and a home equity loan in real dollars, so the recommendation is math, not a sales target.
Honest comparisonVeteran-owned, built around the VA file
Jason Sharon is a U.S. Navy veteran who founded Home Loans Inc. The 100% VA cash-out is the program we know coldest, including which lenders honor the full LTV and how the funding fee nets out.
VA specialistsReal numbers up front
We pull your equity, payoff, and likely costs and hand you the actual cash-available figure before you commit, not a teaser.
Get pre-approved →Run your cash-out numbers with a real broker
Home Loans Inc: Jason Sharon, Mortgage Broker
2557 Ashley Phosphate Rd, North Charleston, SC 29418
Why homeowners trust Home Loans Inc for a cash-out
Jason Sharon founded Home Loans Inc after serving as a nuclear engineer in the U.S. Navy - a background that shows up as precision on every loan file. He holds NMLS #1281448 (company NMLS #1728740) and has spent 8+ years originating purchase and refinance loans, including the structuring calls that decide whether a cash-out or a second lien actually serves the borrower.
Because we are a veteran-owned broker and not a single bank, your cash-out file is shopped across more than 50 wholesale lenders on one application. Clients have left 430+ reviews at a 5.0 rating, and we are BBB A+ accredited. On a cash-out, that independence is the whole point: we are paid to find your best terms, not to sell one lender's loan.
Cash-out refinance, frequently asked
Rated 5.0 by the families we serve.
Jason knows his stuff! We highly recommend him for your mortgage needs! He responds timely, provides information you didn't know you needed, puts the client needs first, and makes common sense adjustments throughout the entire process.
Jason and his team did an amazing job for me. They communicated often and made the entire mortgage process smooth and efficient. I can genuinely say that they are honest, trustworthy and strive to provide the best service possible to their clients.
Jason has been awesome since the beginning. He has been communicative, professional, KNOWLEDGEABLE, and honest. I am very happy with all my services so far, and I recommend UWM!