Best cash-out refinance lenders of 2022
Best cash-out refinance lenders of 2022

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

A cash-out refinance allows you to tap the equity in your home. Find out which mortgage lenders make the process simple. (Shutterstock)

If you want to tap into your home equity without taking out another loan, you may consider a cash-out refinance. This involves taking out a new mortgage for a larger amount than you currently owe. The new loan pays off your current mortgage, and you receive the difference as cash. 

You can use the money from a cash-out refinance for things like home improvements, paying for a college education, or to consolidate debt. In this article, we’ll go over the best cash-out refinance lenders on the market and some common questions you may have about the process.

If you’re thinking about cash-out refinancing, Credible can help you compare mortgage refinance rates from various lenders in minutes.

Where to get a cash-out refinance loan

Most mortgage lenders offer cash-out refinancing as an option. This includes traditional banks and credit unions, as well as online lenders. You can use Credible’s cash-out refinance calculator to help you determine the amount of cash you’ll be able to take out, based on the equity you have in your home.

No matter which lender you choose, a cash-out refinance has its benefits and drawbacks. For example, you can access the cash you need without adding a loan to your debt burden, but you also eat into the equity you’ve built up in your home.

Best cash-out refinance lenders

Consider these lenders for your cash-out refinance.

3 best cash-out refinance lenders

The following lenders are Credible partners that can help you tap your home equity through a cash-out refinance

Caliber Home Loans

Best for: Veterans

Caliber Home Loans is a national lender with expertise in lending to current military members, veterans, and their spouses — though you don’t need military experience to borrow from Caliber.  

Pros

  • Expertise in VA loans — If you’re seeking a VA loan cash-out refinance, Caliber’s military and veteran lending experts can help you out. While Caliber is a Credible partner, Credible doesn’t offer VA cash-out refinances. But Credible can help you find a great rate on a standard cash-out refinance.
  • Available nationwide — Caliber lends in all 50 states and has branches across the country.
  • Specialty loans for nontraditional borrowers — Caliber’s “Smart Series” of loans includes options if you need a jumbo loan after a negative credit event, are a self-employed borrower, or a real estate investor.

Cons

  • Mortgage rates not available online — Caliber Home Loans doesn’t publish current mortgage rates online, making it harder to shop around.
  • No cash-out refinance calculator — While Caliber offers a refinance calculator, you don’t have the option to enter a cash-out amount.
  • Home equity loans not available — Other ways of taking cash out of your home won’t be found at Caliber.

loanDepot

Best for: Multiple refinances

loanDepot offers a fully online mortgage application and is licensed in all 50 states. 

Pros

  • Fees waived on future refinances Once you refinance with loanDepot, the company advertises a “Lifetime Guarantee” where it’ll waive your lender and appraisal fees if you decide to refinance again with the company down the line.
  • Convenient appointment scheduling — You can schedule a phone call with a loan officer online, so you won’t have to call in and wait on hold.
  • In-person service available — loanDepot has more than 200 branches nationwide, so you can talk to a loan officer in person if you prefer.

Cons

  • Must apply to see rates — Before you can see interest rates, you’ll need to start a loan application.
  • No cash-out calculator — It’s more difficult to find out how much money you can take out without this feature.
  • No home equity loans — If you decide against a cash-out refinance and want to tap home equity another way, you’ll need to choose another lender.

Rocket Mortgage

Best for: Comparing rates

Rocket Mortgage is a fully online mortgage lender that allows you to get pre-approved for a loan any time, day or night.

Pros

  • Online mortgage application You can apply for a refinance loan completely online, 24/7, through Credible, the company’s website, or mobile app.
  • Refinance calculator Rocket Mortgage’s refinance calculator can show you how much money you’ll be able to take out with a cash-out refinance. It also recommends different loan options and shows the monthly payment and interest rate you can expect to pay for each loan.
  • Customer service — While you can apply online without talking to anyone, you also have access to a customer service agent seven days a week by phone or online chat.

Cons

  • No brick-and-mortar locations — If you prefer in-person service, that’s not an option with Rocket Mortgage.
  • No home equity loans available — If you end up deciding a home equity loan is a better way to get the cash you need, you’ll have to look elsewhere.
  • Account required to compare cash-out refinance options — Before you can compare all your loan options, you’ll need to register with Rocket Mortgage and create an online account.

SHOULD I DO A CASH-OUT REFINANCE TO FUND MY INVESTMENTS?

3 other lenders to consider

The following three lenders are not Credible partners, so you won’t be able to easily compare your rates with them on the Credible platform. But they may also be worth considering if you’re looking for a cash-out refinance.

Guaranteed Rate

Best for: Online services

Guaranteed Rate is a national online lender that allows you to refinance a loan with no human contact, including a virtual closing. 

Pros

  • E-closing available Guaranteed Rate’s FlashClose offering allows you to close on a home loan without having to meet in person.
  • Mortgage rates available online — You can look up current rates for a variety of loan options quickly.
  • Cash-out refinance calculator — Guaranteed Rate offers a calculator that allows you to input how much cash you’d like to take out and shows what your new payment might be.

Cons

  • Higher minimum credit score required You need a credit score of at least 620 to take out a loan with Guaranteed Rate, while some other lenders offer loans to people with scores as low as 500.
  • No home equity loans available — While you can tap your home equity through a cash-out refinance, you won’t find cash-out refinance alternatives, like home equity loans or home equity lines of credit (HELOCs), at Guaranteed Rate.
  • Branches not available in all areas While Guaranteed Rate has more than 400 branches across the country, if you prefer in-person service, branches aren’t available in all areas. Four states have no Guaranteed Rate branches: Mississippi, Vermont, West Virginia, and Wyoming.

PenFed

Best for: Low fees

Pentagon Federal Credit Union, better known as PenFed, offers mortgages with no lender fees to its members.

Pros

  • No lender fees — PenFed doesn’t charge a lender fee on its mortgages, potentially saving you thousands of dollars in closing costs. Other fees may apply.
  • Lender credits available — You may be eligible for a lender credit between $500 and $2,500, depending on the size of your mortgage, which you can use to reduce your closing costs.
  • Available nationwide — PenFed services are available in all 50 states, as well as Guam, Okinawa, and Puerto Rico.

Cons

  • Must be a member to borrow money — PenFed is a credit union, meaning you’ll need to officially become a member in order to borrow money. Anyone can join for just $5, but it’s still another step you’ll need to take.
  • Mortgage rates not available online To get a rate quote, you’ll need to fill out a fairly lengthy form and enter your contact information.
  • No cash-out refinance calculator online — PenFed doesn’t offer an easy way to determine the amount of cash you might be able to take out.

SoFi

Best for: Rate shoppers

SoFi is an online personal finance company that offers cash-out refinances and significant discounts to existing customers.

Pros

  • Mortgage rates available online — SoFi publishes current refinance rates for common terms, including 10-, 15-, 20-, and 30-year mortgages.
  • Completely online application — You can complete your SoFi mortgage refinance application from your computer.
  • Discounts for existing customers — If you already have a SoFi personal loan or student loan, you can get a member discount on your cash-out refinance fees.

Cons

  • No personalized rates — You’ll need to create an account to see personalized rates.
  • No FHA loans available If you want an FHA cash-out refinance, you won’t be able to do that with SoFi.
  • Not available in all states SoFi Home Loans aren’t available in four states: Hawaii, Missouri, New Mexico, or New York.

Comparing refinance rates from multiple lenders can help ensure you receive the best cash-out refinance loan available to you. Checking rates is easy when you use Credible.

Methodology

Credible evaluated loan and lender data points in seven categories to identify “best companies” for mortgages. These categories included interest rates, fees, availability of repayment terms and discounts, eligibility requirements, minimum down payment, and the level of customer service provided. 

Because every lender has its own system for evaluating borrowers, the best loan or lender will depend on an individual’s unique circumstance, the loan features that are most important to them, and the interest rate and terms they qualify for. 

Cash-out refinance FAQs

Here are answers to some of the most commonly asked questions about cash-out refinance loans.

How does a cash-out refinance work?

With a cash-out refinance, you take out a new mortgage that pays off and replaces your old one. Your new mortgage will be for a higher amount than you currently owe, with the difference coming to you as cash. 

The amount of cash you can take out depends on your home equity, or the difference between what you owe on your mortgage and what your home is worth. Your new mortgage can generally only be up to a certain percentage of your home value, often 80%.

WHAT IS A LIMITED CASH-OUT REFINANCE AND HOW DOES IT WORK?

What are the requirements to qualify for a cash-out refinance?

To qualify for a cash-out refinance, you generally must have:

  • More than 20% equity in your home
  • A credit score of at least 640. This requirement could be higher depending on the lender, the equity in your home, and the amount of other debt you hold.
  • A debt-to-income ratio below 45%. Debt-to-income measures your total monthly debt payments (including your mortgage, car loans, student loans, etc.) compared to your monthly salary or wages.
  • A history of on-time payments

What’s the difference between a cash-out refinance and a rate-and-term refinance?

With a rate-and-term refinance, you generally take out a new loan for the same amount that you currently owe. You don’t receive any cash back. 

You may choose to use a rate-and-term refinance if interest rates have fallen since you took out your mortgage, allowing you to lower your monthly payment and save on future interest costs. You can also use a rate-and-term refinance to shorten the length of your loan, paying off your mortgage faster.

This is different from a cash-out refinance, where the primary goal is to tap your home equity. Ideally, the interest rate on your new mortgage will be lower than your current loan, but that may not always be the case.

What’s the difference between a cash-out refinance and a HELOC?

Both a cash-out refinance and a HELOC are ways to tap the equity in your home for additional cash.

A cash-out refinance is a new first mortgage for a higher amount than you currently owe. You’ll use the loan to pay off your original mortgage and receive the difference as a lump sum once you close on the loan.

A HELOC is a revolving line of credit that functions much like a credit card. Your HELOC lender offers you a maximum amount you can borrow, and you can draw against this amount multiple times for a set number of years — this is called the draw period. 

During the draw period, you usually must make interest payments on the amount you borrow. At the end of the draw period, you enter the repayment period, where you pay back the total amount you borrowed plus interest.

You can easily check your mortgage refinance options without affecting your credit when you compare mortgage refinance rates from multiple lenders with Credible.

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