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Best cash-out refinance lenders in 2022

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Tapping into your home’s equity can be a smart move, whether it’s to lower high-interest debt, fund a home renovation, pay for college tuition or make progress toward another financial goal. One way you can accomplish this is through a cash-out refinance, in which you refinance your mortgage for more than what you owe and take the difference out in cash. Many mortgage lenders offer cash-out refinancing, and Bankrate evaluated several to determine the best ones to consider. Here are our picks for the best cash-out refinance lenders in 2022.


Methodology

To determine the best cash-out refinance lenders, Bankrate evaluated lenders based on several criteria, including cost (competitive cash-out refinance rates and low or no fees); expediency (approval and closing times); and borrower testimonials.


Best cash-out refinance lenders

Garden State Home Loans

Garden State Home Loans was founded in New Jersey, but the lender has since expanded its services into Connecticut, Delaware, Florida, Maryland, Michigan, New York, Pennsylvania and Virginia. With a 4.7 Bankrate Score out of five stars, this lender has a lot to offer borrowers seeking a cash-out refinance.

Loan products
  • Purchase and refinance, including cash-out refinance
  • Conventional
  • Jumbo
  • FHA
  • VA
  • USDA
  • Home equity loan
  • Construction and renovation loans
Credit requirements
  • 640 (580 potentially for some loans)
Pros
  • Online chat feature to communicate with loan officer
  • Closings typically in 40 days
Cons
  • Not available in all states
  • Not all fees disclosed online

Want to learn more about Garden State Home Loans? Read our full review.

Sage Mortgage

Sage Mortgage can be a quick and easy option for those who want to complete the entire cash-out refinancing process online. Because Sage Mortgage works with multiple wholesale lenders, you’re likely to find a competitive offer. (Editor’s note: Sage Mortgage is affiliated with Red Ventures, parent company of Bankrate.)

Loan products
  • Purchase and refinance, including cash-out refinance
  • Conventional
Credit requirements
  • 660
Pros
  • Closings average 27 days
  • Application is entirely online
  • Ability to get matched with the best rate for your circumstances
Cons
  • No government-insured loans
  • No HELOCs (home equity line of credit) or home equity loans

You can learn more about Sage Mortgage in our full review.

LowRates.com

You can apply for a cash-out refinance through the LowRates.com website, with full credit underwriting completed in just 24 hours. If you want to work with a loan officer in-person, you’ll have that option at a Sun West Mortgage Company branch (Sun West operates LowRates.com), but these locations are only in about 20 states at this time.

Loan products
  • Purchase and refinance, including cash-out refinance
  • Conventional
  • Jumbo
  • FHA
  • VA
  • USDA
  • HELOC and home equity loan
  • Construction and renovation loans
  • Investment property
  • Reverse mortgage
Credit requirements
  • 620
Pros
  • Complete credit underwriting available in under 24 hours
Cons 
  • Not available in Georgia and Massachusetts

Interested in borrowing with LowRates.com? Learn more in our full review.

Interfirst Mortgage Company

Interfirst Mortgage Company’s Bankrate Score of 4.8 out of five stars reflects the benefits of working with this lender. The cash–out refinance process through Interfirst kicks off with an online application, which you’ll need to complete before you can receive a rate quote.

Loan products
  • Purchase and refinance, including cash-out refinance
  • Conventional
  • Jumbo
  • Investment property
Credit requirements
  • 620
Pros
  • Fast preapproval
  • Online application process
  • No fees
Cons
  • Doesn’t consider alternatives to traditional credit scores

Check out our full review of Interfirst Mortgage Company to learn more.

Blue Spot Home Loans

Blue Spot Home Loans, an online lender part of Cherry Creek Mortgage, offers a streamlined online application experience, complete with speedy closings. Notably, this lender is very transparent about rates on its website, which includes a customizable rate tool.

Loan products
  • Purchase and refinance, including cash-out refinance
  • Conventional
  • Jumbo
  • FHA
  • VA
  • USDA
  • Construction and renovation loans
  • Reverse mortgage
Credit requirements
  • 620
Pros
  • Will consider alternative credit data
  • Speedy online application process
Cons 
  • Not available everywhere

Cash-out refinance FAQ

What are the requirements for a cash-out refinance?

To be eligible for a cash-out refinance, you typically need to:

  • Have a minimum credit score of 620
  • Have a debt-to-income (DTI) ratio below 50 percent
  • Maintain a minimum 20 percent equity in your home following the cash-out (depending on loan type)

Who is cash-out refinancing for?

A cash-out refinance is typically the most beneficial when interest rates are low, and for borrowers who meet the requirements and have specific goals for the funds they’re withdrawing. This includes those seeking to consolidate high-interest debt, complete home renovations or fund a college education.

How much cash can I take out of my home?

How much you can cash out on your home varies, and most lenders want to see you maintain at least 20 percent equity after the refinance. For example, let’s say your home is currently valued at $200,000, and you have $120,000 left to pay on your mortgage. With that much equity ($80,000, or 40 percent), you might be able to refinance your loan to a new one with a higher balance and take cash out, so long as you retain at least 20 percent equity when all is said and done.

What credit score is required for a cash-out refinance?

In general, you’ll need a credit score of at least 620 to qualify for a cash-out refinance. The exact score you’ll need can vary based on the lender you work with and other factors.

Cash-out refinance vs. rate-and-term refinance

A cash-out refinance is different from a rate-and-term refinance, in which you lower the rate on your mortgage, change the length of the loan term, or both. A cash-out refinance can also lower your rate, but since it involves withdrawing a portion of your home’s equity in a lump sum, this adds to the amount of your loan and increases the interest you’ll pay. Those funds can be used for a variety of purposes, such as a major home renovation.

Cash-out refinance vs. HELOC

A cash-out refinance isn’t the only way to tap your home’s equity; you can also pursue a home equity line of credit (HELOC).

With a HELOC, your first mortgage remains intact, but you’ll have access to a revolving source of funds throughout the HELOC draw period, which can be up to 10 years. You are only obligated to pay interest on the funds you withdraw during this period. Once the draw period ends, any balance must be repaid, usually over 15 or 20 years.

The advantages of a HELOC are that you’re only responsible for paying what you use, you can access the funds at any time and you won’t incur interest on untapped funds. However, HELOCs come with variable interest rates, which means they can change, and they could be higher than what you’d get with a traditional cash-out refinance.

Summary: Best cash-out refinance lenders

With additional reporting by Sarah Sharkey

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Written by
Erik J. Martin
Contributing writer
Erik J. Martin is a Chicago area-based freelance writer/editor whose articles have been featured in AARP The Magazine, Reader's Digest, The Costco Connection, The Motley Fool and other publications. He often writes on topics related to real estate, business, technology, health care, insurance and entertainment.
Edited by
Mortgage editor