What is a conventional cash-out refinance?
A conventional cash-out refinance pays off the existing mortgage and gives the borrower additional cash from accumulated equity. Maximum LTV is typically 80% on a 1-unit primary residence, lower on multi-unit and investment. Pricing carries cash-out LLPAs that have tightened in recent years.
What this actually means.
Cash-out math: loan balance at closing = existing payoff + new cash to borrower + closing costs (if rolled in). Maximum LTV: 1-unit primary 80%; 2-4 unit primary 75%; second home 75%; investment 1-unit 75%, 2-4 unit 70%. Cash-out LLPAs are layered on top of credit/LTV adjustments and have grown materially since 2023 updates. Compare against HELOC for smaller equity needs — HELOC pricing often beats cash-out refinance below 50% combined LTV. Subject to Fannie/Freddie guidelines.
Where this can move.
Rate environment, equity, credit, current loan type, seasoning, AUS findings (appraisal waiver eligibility), and program rules can change the answer.
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More conventional questions on Refinance.
Educational only. Conventional loan guidelines, lender overlays, rates, fees, PMI, LLPAs, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with Fannie Mae, Freddie Mac, FHFA, or any government agency.