FHA Cash-Out Refinance Loan
You may be surrounded by money you don’t even know you have. With an FHA cash-out refinance loan, homeowners can access their home equity for cash while refinancing their existing mortgage. Access to these funds can help support financial goals or manage expenses. As the nation’s #1 Retail Mortgage Lender, CrossCountry Mortgage brings deep experience, nationwide reach and trusted guidance to homeowners considering the FHA cash-out program.
Why Choose CrossCountry Mortgage for an FHA Cash-Out Refinance
- Clear guidance on FHA cash-out refinance eligibility and requirements
- Support through appraisal, underwriting and closing
- Access to FHA-backed refinancing options designed for a range of credit profiles
- A consistent process from application through funding
What is an FHA cash-out refinance?
An FHA cash-out refinance allows you to access cash that’s otherwise tied up in your home. You can borrow up to 80% of the appraised value of your property, so if you have sufficient equity (the difference between the value of your home and the amount you owe on your mortgage), you can refinance your current mortgage and still receive cash to use as you wish.
Benefits of an FHA cash-out refinance loan
An FHA cash-out refinance uses the equity in your home to provide cash with a lower mortgage interest rate than most personal financing options, such as a credit card. These funds can help you improve your finances or achieve personal goals, such as paying for:
- College tuition
- Home improvement projects
- A car loan or a new car
- Paying off higher-interest debt
- Medical expenses
In addition to accessing cash, an FHA cash-out refinance loan may offer several potential benefits, including the following:
- Lower your interest rate
- Change your loan term
- Replace an adjustable-rate mortgage with a fixed-rate mortgage
- Get lower credit requirements than a conventional loan
- Access equity without selling your home
- Pay potentially lower monthly payments
- Enjoy low closing costs
What should you consider?
While an FHA cash-out refinance comes with many benefits, all FHA loans require mortgage insurance in the form of an upfront premium at closing and an annual mortgage insurance premium that is paid monthly. If your home has significant equity, you may benefit more from a conventional cash-out refinance.
FHA cash-out refinance guidelines
When you apply for an FHA cash-out refinance, we’ll review your income, assets and credit history and order a new appraisal of your property. The FHA requires borrowers to meet specific debt-to-income ratio guidelines in certain circumstances and have a history of on-time mortgage payments.
It’s important to note that FHA cash-out refinance loans are strictly for owner-occupied properties. Additionally, if you’ve lived in your home for less than a year, the lower of either the appraised value or original purchase price will be used to calculate the maximum loan amount.
FHA cash-out refinance loan eligibility requirements
- You must have a minimum credit score of at least 500 (additional conditions may apply)
- You must have made all mortgage payments on time for the past 12 months
- You cannot owe more than 80% of your home’s value before or after refinancing
- You can only refinance a primary residence
How to apply for an FHA cash-out refinance
Applying for an FHA cash-out refinance loan follows a simple, structured process. CrossCountry Mortgage will review your eligibility, home value and financial profile. While each borrower’s situation is different, the steps below outline what homeowners can generally expect when applying for an FHA cash-out refinance loan.
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Start by connecting with a CCM loan officer who can explain FHA cash-out refinance guidelines, review your goals and help determine whether this type of refinance may be a good fit for your situation.
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You’ll typically need to provide documents such as recent pay stubs, tax returns and information about your existing mortgage. These help verify income, assets and employment.
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Once your application is submitted, a credit check is completed as part of the review process to assess eligibility under FHA requirements.
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An appraisal is ordered to determine your home’s current value and confirm available equity, which plays a role in calculating the maximum loan amount.
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Your application and supporting documents are reviewed to ensure FHA guidelines are met. Additional information may be requested during this stage.
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If approved, you’ll move to closing. Closing costs typically range between 2–5% of the loan amount, depending on factors such as loan size and location.
Cash-out refinance FAQs
FHA cash-out refinancing can be a useful option for homeowners who want to access home equity while refinancing their mortgage. Because there are specific guidelines, many borrowers have questions about how much they can borrow, who may qualify and what costs to expect. Eligibility, loan terms and costs can vary based on individual circumstances, so it’s always best to speak with a loan officer to map out the ideal FHA cash-out plan for your situation.
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The amount you can borrow depends on your home’s appraised value, your existing mortgage balance and FHA loan limits. Borrowers may be able to refinance up to a percentage of their home’s value and receive the remaining equity as cash.
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To qualify for an FHA cash-out refinance, borrowers must meet FHA eligibility requirements, which typically include owner-occupancy, credit qualifications, sufficient home equity and a history of on-time mortgage payments. Additional requirements may apply based on your financial profile and loan details.
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FHA cash-out refinance costs may include closing costs, lender fees and mortgage insurance premiums required by FHA loans. Closing costs are often calculated as a percentage of the loan amount and can vary depending on factors such as location, loan size and individual circumstances.
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The FHA generally allows borrowers to refinance up to a maximum LTV ratio set by FHA cash-out refinance guidelines. This limit is based on the appraised value of the home and applies to owner-occupied primary residences. A loan officer can help confirm current FHA cash-out refinance LTV requirements.
Refinance tools and resources
Amount of funds received from cash-out refinance will be combined with mortgage principle and paid off over the loan term by borrower. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the Federal government.