Cash-Out Refinance: How to Access Your Home’s Equity
In this guide, we’ll explain what a cash-out refinance is, how it compares to other types of refis, like a rate & term refi or FHA streamline, and how to decide which option is best for your financial goals.
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What is a Cash-Out Refinance?
- Cash in hand to use however you want (debt, renovations, investments, etc.)
- A new mortgage that may also include a better rate, a new term, or a fixed structure
- The ability to consolidate high-interest debt into one monthly payment
Quick Answer
A cash-out refinance lets you borrow against your home equity by replacing your mortgage with a new, larger one and receiving the difference in cash.
Why Consider a Cash-Out Refinance?
Here’s why homebuyers choose rate & term refinances:
Consolidate Debt
Use the funds to pay off high-interest credit cards, personal loans, or student debt, reducing your overall monthly obligations.
Renovate Your Home
Pay for major upgrades like a kitchen remodel, new roof, or energy-efficient systems, and potentially increase your property value.
Cover Major Expenses
Pay for tuition, medical bills, business expenses, or other large needs without turning to high-interest consumer loans.
Restructure Your Mortgage
You may be able to refinance into a more stable or lower-rate loan while also accessing cash.
Pro Tip
If you have a lot of equity, you can use a cash-out refinance to move from an FHA to a conventional loan and eliminate mortgage insurance, while still accessing some of your equity.
Cash-Out Refinance Requirements in 2025
Credit Score
620+ FICO
Time Since Closing
At least 6-months after closing
Loan-to-Value
Typically 80% LTV
Debt-to-Income Ratio
≤43% required by most lenders
Do I have to pay taxes on the cash I receive from a cash-out refinance?
No. Cash from a refinance is not considered income, so it’s not taxable.
Compare a Cash-Out Refi vs. Rate & Term Refi & FHA Streamline
Cash-Out Refi
Rate & Term Refi
FHA Streamline Refi
Should you refinance?
Refinancing can help you save on your mortgage or turn equity into cash in your pocket. Plug in your info below to see your options.
Monthly Savings
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Total Savings
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The UMortgage mortgage calculators are for estimation purposes only. This is not a commitment to lend. For an exact quote based on your individual financial circumstances, please contact us.
How to Apply for a Cash-Out Refi with UMortgage
Get Pre-Qualified
Fill out a short form or talk to a UMortgage Loan Expert. We’ll check your eligibility and loan options.
Review Your Equity
We’ll help you estimate how much equity you’ve built and how much cash you may be eligible to take out.
Apply & Upload Docs
We’ll collect income, credit, and property info. Most cash-out refis require a new appraisal.
Close & Receive Your Funds
Once approved, your new mortgage pays off your current loan and the rest is deposited straight to your bank account.
Frequently Asked Questions
Wondering if a cash-out refinance makes sense for you? Get clear, expert answers to the most common questions - cost, timing, benefits, and more!
Here's Why UMortgage is Your Best Choice
Relationships, Not Transactions
We’re here for more than just your mortgage. We’ll stick with you beyond closing to help you gain financial freedom through homeownership.
Local & Nationwide Expertise
With licensed loan officers across the country and deep knowledge of your local market, we’ll help you buy with confidence anywhere you call home.
Fast, Transparent Closings
We communicate with you every step of the homebuying or refinance process so you can close quickly without any hidden fees or surprises.