Refinance Program

Cash-Out Refinance:
Put Your Equity to Work

Replace your existing mortgage with a larger loan and receive the difference in cash. Consolidate debt, fund home improvements, or access capital, Mortgages by Channing closes cash-out refis every day.

Get My Refinance Quote Buy a Home

✓ Access up to 80% LTV✓ Conventional, FHA & VA options✓ No restrictions on use of funds✓ 620+ credit score

The Basics

How a Cash-Out Refinance Works

A cash-out refinance replaces your existing mortgage with a new, larger loan. The difference between your new loan balance and what you currently owe is paid to you at closing in cash. You end up with a single mortgage payment and a lump sum you can use however you choose.

The amount you can access depends on your home's current value and how much equity you've built. Most conventional cash-out refinances allow you to borrow up to 80% of your home's appraised value. VA cash-out allows up to 100% LTV in some cases.

Quick Cash-Out Calculation Example

Current Home Value

$400,000

80% LTV Maximum New Loan

$320,000

Current Mortgage Balance

$220,000

Closing Costs (est.)

$5,000

Cash Received at Closing

~$95,000

80%

Max LTV (conventional)

620

Typical min. credit score

6mo

Min. seasoning required

21 to 30

Days to close

How People Use It

Common Uses for Cash-Out Refinance Funds

There are no restrictions on how you use cash-out funds. These are the most common reasons homeowners refinance and pull equity.

Home Improvements

Kitchen remodel, addition, roof replacement, or major system upgrades. Improvements often increase the home's value, partially offsetting the larger loan.

Debt Consolidation

Pay off high-interest credit cards, auto loans, or personal loans and roll them into one lower-rate mortgage payment. Interest rate arbitrage at its most practical.

Investment Property Down Payment

Use equity from your primary home to fund the down payment on a rental property. One of the most common real estate investment strategies.

Education Expenses

Fund tuition, training, or education costs at mortgage rates, often significantly lower than student loan or personal loan rates.

Business Capital

Fund business expansion, equipment, or working capital. Self-employed owners often use home equity as a lower-cost alternative to business loans.

Emergency Reserve

Build a cash reserve after a period of low liquidity. Some homeowners cash out simply to have funds available without needing to sell the home.

Cash-out increases your loan balance, plan accordingly

A cash-out refinance is not free money. Your new loan is larger than your old one, which usually means a higher monthly payment even if the rate is lower. Make sure the use of funds, whether it's eliminating high-interest debt, increasing home value, or generating investment income, justifies the larger obligation. Mortgages by Channing will walk you through the full payment comparison before you decide.

Eligibility

Cash-Out Refinance Requirements

Requirements vary by loan type, but here are the standard conventional cash-out guidelines. FHA and VA have their own specific rules covered below.

Requirement	Conventional Standard
Min. Credit Score	620 (better pricing at 680+)
Max LTV	80% of appraised value
Min. Equity Required	20% remaining after cash-out
Property Seasoning	6 months ownership minimum
Max DTI	43 to 50% (DU approved)
Income Documentation	Same as purchase, full doc required
New Appraisal	Required, establishes current value
Owner-Occupied	Primary, second home, investment all OK

Want To Know What This Looks Like On Your Numbers?

Every scenario is different. A soft credit check tells you where you actually stand, and nothing hits your report until you decide to move forward.

See My Refinance Numbers

By Loan Program

Cash-Out Rules by Loan Type

Each loan program has its own LTV limits, seasoning requirements, and rules. Here's a quick comparison.

Conventional Cash-Out

Max 80% LTVMust retain at least 20% equity after the cash-out.
Available on investment propertiesInvestment property LTV typically capped at 75%.
No restrictions on fund use
6-month seasoning requirementMust have owned and been on title at least 6 months.

FHA Cash-Out

Max 80% LTVSame as conventional. Must maintain 20% equity.
580+ credit scoreLower credit threshold than conventional.
Primary residence onlyFHA is owner-occupied. Cannot cash out on investment properties.
12-month payment history requiredMust have 12 months of on-time payments on existing loan.

VA Cash-Out

Up to 100% LTV on some programsThe most generous cash-out option available for eligible veterans.
Can refinance non-VA loan into VAIf you have a conventional loan, you can refinance into a VA cash-out and access 100% LTV.
VA funding fee appliesExempt for 10%+ disability rating. Otherwise rolled into loan balance.
Primary residence only

Non-QM Cash-Out

Bank statement income qualificationSelf-employed borrowers can cash out without providing tax returns.
Higher loan amounts availableNon-QM cash-out goes above the conforming limit for high-value properties.
Typically max 75% LTVSlightly more conservative than conventional given alternative documentation.
Rate premium vs. conventionalExpect 0.50% to 1.50% above comparable conventional cash-out rates.

Alternative

Cash-Out Refinance vs. HELOC

Both let you access home equity, but they work very differently. The right choice depends on how you plan to use the funds and your current interest rate situation.

Choose Cash-Out Refi When...

You want one fixed paymentReplaces your existing mortgage, one loan, one payment, fixed rate.
You're taking a large lump sumLump-sum distributions are what cash-out is built for. Full amount available at closing.
Current rates are lower than your existing rateIf you can lower your rate and pull cash, you win twice.
You want rate certainty long-term30-year fixed cash-out locks in your rate for the life of the loan.

Consider HELOC When...

You need funds in stages, not all at onceHELOC is a revolving line, draw what you need, when you need it.
Your current mortgage rate is very lowA cash-out refi replaces your whole loan. If your existing rate is 3%, refi may not make sense.
You only need a smaller amountFor smaller needs (under $50,000), a HELOC may have lower total costs than a full refi.

Existing rate matters most in this decision

If your current mortgage rate is significantly below today's market, a cash-out refi means refinancing your entire balance at a higher rate. In that case, a HELOC keeps your existing low-rate first mortgage intact and adds a second lien for the equity access. Mortgages by Channing will show you the total payment comparison on both options before you decide.

The Process

How to Get a Cash-Out Refinance

The process is similar to your original purchase, appraisal, income verification, underwriting. The main difference is there's no seller or contract timeline to manage.

What You'll Need

2 years tax returns and W-2s
30 days recent pay stubs
2 months bank statements
Current mortgage statement
Homeowners insurance declarations page

Timeline

1Application & rate lock, Day 1
2Appraisal ordered, Day 2 to 3
3Appraisal received, Day 7 to 14
4Underwriting, Day 14 to 21
5Closing, Day 21 to 30
63-day rescission + funds disbursed, Day 33 to 35

The 3-day right of rescission

On a primary residence cash-out refinance, federal law gives you 3 business days after closing to cancel the transaction, called the right of rescission. Funds are not disbursed until after this window closes. On investment property refinances, there is no rescission period, funds disburse at closing.

See How Much Cash You Can Access

Mortgages by Channing will calculate your maximum cash-out, compare loan types, and give you a side-by-side payment breakdown. No obligation.

See My Refinance Numbers 337-476-2623

Common Questions

Cash-Out Refinance FAQ

For a conventional cash-out refinance, you need at least 20% equity remaining after the cash-out, meaning you can borrow up to 80% of your home's current appraised value. If your home is worth $400,000, the maximum new loan is $320,000. After subtracting your existing balance and closing costs, that's your cash available. VA cash-out allows up to 100% LTV for eligible veterans.

Generally no, cash from a refinance is loan proceeds, not income, so it's not taxable. However, if you use the funds for investment purposes, there may be deductibility considerations on the interest. If you use funds for home improvements, mortgage interest may remain deductible up to certain limits. Consult a tax advisor for your specific situation, Mortgages by Channing handles the mortgage, not the tax strategy.

A cash-out refinance has a temporary impact on credit, the hard inquiry, closing the old loan, and opening a new tradeline. Most borrowers see a modest dip (5 to 15 points) that recovers within a few months of on-time payments. The larger factor is the increased loan balance, if it pushes your overall debt significantly higher, that can weigh on utilization in the short term. Most borrowers find the credit impact minor compared to the financial benefit.

Most lenders require at least 6 months of seasoning, meaning you must have owned the property and been on title for at least 6 months before a cash-out refinance. Some lenders require 12 months. The exception: if you bought with cash and want to do a "delayed financing" refinance, there are programs that allow cash-out shortly after purchase under specific conditions.

Yes, conventional cash-out refinances are available on investment properties, typically up to 75% LTV (vs. 80% for primary residences). Lenders treat investment property cash-outs as slightly higher risk, so rates and reserve requirements are typically stricter. FHA and VA cash-out are primary residence only.

Closing costs on a cash-out refinance are similar to a purchase, typically 2% to 5% of the new loan amount. This includes origination fees, appraisal, title, recording fees, and prepaid items. Many borrowers roll closing costs into the new loan balance rather than paying out of pocket, which reduces the net cash received but eliminates upfront cost. Mortgages by Channing will provide a full loan estimate early in the process so there are no surprises.

Yes, cash-out refinances typically carry a slightly higher rate than rate-and-term refinances (usually 0.125% to 0.25% higher on conventional loans). Lenders view cash-out as marginally higher risk because you're increasing your loan balance. The gap is small for well-qualified borrowers, and Mortgages by Channing shops multiple lenders to find the most competitive cash-out pricing available. Learn about rate-and-term refinance →

The Application

Apply From Your Phone In Fifteen Minutes

The whole application runs on your phone. Snap photos of your documents, connect your bank, and you're done. It reaches me the minute you submit it.

Starts with a soft credit check, so your score is never touched
We show you the new payment and what the cash actually costs you
Upload documents with your phone camera, no scanner needed
You hear back from Channing, not from a call center queue

If the numbers say wait, I'll tell you that too, and then we make a plan to fix whatever is in the way.

See My Refinance Numbers Call 337-476-2623

10:40Secure

Complete Your Application

Five short steps. Most people finish in about fifteen minutes.

Tell us what you're looking for
We check your available equity
Upload your documents

Continue

Mortgages by ChanningJust now

Your refinance numbers are ready. I sent the full breakdown to your email.

Mortgages by Channing12m ago

Got your application. I'm reviewing it now and will call you this afternoon.

Real Closings

Real Clients.
Real Closings.

Real families we have helped get from pre-approval to keys in hand.

Find Out Where You
Actually Stand

A soft credit check tells you what you qualify for before anyone pulls hard credit. If the numbers say wait, I will tell you that too, and then we make a plan to fix whatever is in the way.