How it works
Say your home is worth $800,000 and you owe $400,000. A cash-out refinance could replace that $400,000 loan with a larger one and pay you the difference in cash, up to the limit your program allows. Your old mortgage is paid off, and you make one new payment going forward.
(Example for illustration only. Actual amounts depend on your home's value, credit, and program guidelines.)
Popular reasons to cash out
- Home improvements that add comfort and value
- Paying off high-interest debt like credit cards or personal loans
- Building a financial cushion for emergencies or opportunities
- Big life expenses like education, a wedding, or helping family
- Buying out a co-owner after a divorce or inheritance
Cash-out refinance or a second loan?
A cash-out refinance replaces your whole mortgage, so the new rate applies to your entire balance. If your current first mortgage has a rate you'd like to keep, a HELOC or home equity loan may be a better way to borrow a smaller amount. We'll compare both so you can see which costs less over time.
Good to know
- Occupancy matters. Cash-out loans on a home you live in, a second home, and an investment property follow different guidelines.
- Timing matters. If you recently bought or refinanced, there may be a waiting period before you can take cash out.
- There are closing costs. We'll show you all the costs up front so there are no surprises.
Where this is available
Cash-out refinancing is available for homes you live in and investment properties in California, Arizona, Colorado, Florida, and Texas. In Texas, state law sets special rules for home equity on the home you live in. See Texas.
Program availability can vary by state and property. Contact us to confirm options for your home.