Best Mortgage Companies for Cash-Out Refinance in 2025
Best Mortgage Companies for Cash-Out Refinance
Tapping into your home’s equity can be a strategic financial move when you need funds for major expenses like home improvements, debt consolidation, or education costs.
Cash-out refinancing allows homeowners to replace their current mortgage with a new, larger loan and pocket the difference in cash.
However, finding the right mortgage company for your cash-out refinance can significantly impact your overall experience and long-term financial health.
This guide explores the top mortgage companies for cash-out refinance, examining their strengths, potential drawbacks, and what makes them stand out in today’s competitive market.
What to Consider When Choosing a Cash-Out Refinance Lender
Interest Rates and APR
The interest rate on your new mortgage will directly affect your monthly payments and the total cost of borrowing. When evaluating lenders, consider:
- Current rate offerings compared to market averages
- Fixed vs. adjustable rate options
- Relationship discounts for existing customers
- Rate lock periods and policies
Fees and Closing Costs
Cash-out refinances typically involve various fees that can significantly impact the overall value of your refinance:
- Origination fees
- Application fees
- Appraisal costs
- Title insurance
- Closing costs
Look for lenders that offer competitive fee structures or closing cost credits that can offset these expenses.
Loan-to-Value (LTV) Limits
Different lenders have varying policies on how much equity you can access:
- Conventional loans typically allow up to 80% LTV
- FHA loans may permit up to 85% LTV
- VA loans can sometimes allow up to 100% LTV for eligible veterans
Customer Experience and Service
The refinance process can be complex, making quality customer service essential:
- Digital application and document submission capabilities
- Responsive communication channels
- Dedicated loan officers
- Clear timeline expectations
Top Mortgage Companies for Cash-Out Refinance
Rocket Mortgage
Strengths:
- Streamlined digital application process
- Quick closing times (as fast as 15-30 days)
- Excellent customer service ratings
- User-friendly mobile app for tracking application status
Considerations:
- May not always offer the lowest rates
- Limited physical branch locations for in-person service
Chase Home Lending
Strengths:
- Competitive rates for existing banking customers
- Extensive physical branch network
- Diverse loan product offerings
- Potential relationship discounts
Considerations:
- Application process may be more involved than some online lenders
- May require higher credit scores for best rates
Bank of America
Strengths:
- Preferred Rewards program offers rate discounts up to 0.375%
- Reduced origination fees for eligible customers
- Large national footprint with in-person service options
- Strong digital tools and resources
Considerations:
- May have stricter approval requirements
- Processing times can be longer than some competitors
Better Mortgage
Strengths:
- No origination fees or lender fees
- 100% online application process
- Quick pre-approval process
- Transparent pricing structure
Considerations:
- No physical branches for in-person service
- Limited loan types compared to traditional banks
Veterans United
Strengths:
- Specializes in VA loans with competitive rates
- Allows higher LTV ratios for eligible veterans
- Excellent customer service for military members
- Streamlined process for VA cash-out refinances
Considerations:
- Primarily serves military members and veterans
- Limited conventional loan options
loanDepot
Strengths:
- Lifetime guarantee that waives lender fees for return customers
- Blend of digital convenience and personal service
- Quick closing times
- Diverse loan product offerings
Considerations:
- Rates may not be the lowest available
- Some customers report communication challenges during the process
Current Market Conditions and Timing
Interest Rate Environment
Cash-out refinancing is most advantageous when:
- Current market rates are lower than your existing mortgage rate
- You plan to stay in your home long enough to recoup closing costs
- You have a specific purpose for the funds that provides financial benefit
Home Equity Considerations
Before pursuing a cash-out refinance, evaluate:
- Your current equity position (typically need at least 20% equity)
- Local housing market stability
- Future plans for the property
Qualification Requirements
Credit Score Expectations
Most lenders require:
- Minimum 620 credit score for conventional loans
- 580-620 for FHA loans
- 580-620 for VA loans (though some lenders may have higher requirements)
Higher credit scores typically qualify for better rates and terms.
Debt-to-Income Ratio
Lenders generally look for:
- Maximum 43% DTI for conventional loans
- Up to 50% DTI for FHA loans with compensating factors
- Similar guidelines for VA loans with some flexibility
Income and Employment Verification
Expect to provide:
- Two years of tax returns
- Recent pay stubs
- Employment verification
- Explanation for any employment gaps
How to Apply for a Cash-Out Refinance – Step by Step Guide
- Assess your needs and financial situation
- Determine how much cash you need
- Check your credit score and report
- Calculate your home’s current value
- Shop and compare lenders
- Request quotes from multiple lenders
- Compare rates, terms, and fees
- Read customer reviews and satisfaction ratings
- Gather necessary documentation
- Income verification
- Asset statements
- Current mortgage information
- Property information
- Submit your application
- Complete the lender’s application process
- Pay for appraisal if required
- Respond promptly to requests for additional information
- Review loan estimate and closing disclosure
- Carefully examine all terms and conditions
- Verify the cash-out amount matches your expectations
- Understand all associated costs
- Close on your new loan
- Schedule closing appointment
- Sign final paperwork
- Receive funds typically within 3-5 business days after closing
Frequently Asked Questions
How much equity can I cash out with a refinance?
Most conventional lenders allow you to borrow up to 80% of your home’s value, minus your current mortgage balance. Government-backed loans may offer different limits, with FHA allowing up to 85% and VA loans potentially up to 100% for eligible veterans.
How long does a cash-out refinance take?
The process typically takes 30-45 days from application to closing, though this can vary by lender. Online lenders may offer faster timelines, while traditional banks might take longer.
Will a cash-out refinance affect my credit score?
The application will generate a hard inquiry on your credit report, which may temporarily lower your score by a few points. However, if you make payments on time, the new loan can positively impact your credit over time.
Can I use cash-out refinance funds for any purpose?
Yes, there are generally no restrictions on how you use the funds. Common uses include home improvements, debt consolidation, education expenses, and emergency funds. However, using the money for investments or non-essential purchases should be carefully considered.
Is cash-out refinancing tax deductible?
The interest on your new mortgage may be tax-deductible if the funds are used for home improvements that substantially add value to your property. Consult with a tax professional for guidance specific to your situation.
Conclusion
Selecting the right mortgage company for your cash-out refinance requires careful consideration of rates, fees, service quality, and your specific financial needs.
By comparing multiple lenders and understanding the full scope of their offerings, you can secure a refinance that provides the funds you need while maintaining favorable loan terms.
Remember that market conditions fluctuate, so timing your refinance appropriately can lead to significant savings.
Please always consult financial advisors when making major decisions about your home equity to make sure it matches your long-term financial goals.
