Cash-out refinance — turn your home equity into cash
If you've built equity in your home, a cash-out refinance lets you tap into that equity and receive a lump sum of cash at closing — while replacing your existing mortgage with a new one. It's one of the most powerful financial tools available to homeowners, and typically comes with significantly lower interest rates than personal loans or credit cards. We serve homeowners across Michigan, Florida, Arizona, and Texas.
How does a cash-out refinance work?
You borrow more than you currently owe and receive the difference as cash. Most conventional lenders allow you to borrow up to 80% of your home's value. Here's a simple example:
Common uses for the cash
Home improvements
Often the most financially sound use — renovations add value back to the property you're borrowing against.
Debt consolidation
Pay off high-interest credit cards or personal loans at a much lower mortgage rate — and a single monthly payment.
Investment property
Use your equity as a down payment on a rental or investment property without liquidating other assets.
Education expenses
Fund tuition or education costs at a rate far below most student loans or private financing options.
Medical or emergency costs
Cover unexpected expenses without high-interest debt — home equity is often the lowest-cost option available.
Major life expenses
Weddings, family events, or other significant costs — no restrictions on how you use the cash at closing.
Cash-out refinance vs. your other options
Cash-out refinance
Replaces your entire mortgage with a new, larger loan. You receive the difference in cash at closing. One loan, one payment.
Best when: rates are competitive with your existing mortgageHome equity loan
A second loan on top of your existing mortgage. Fixed rate and fixed monthly payment — your first mortgage stays untouched.
Best when: you don't want to disturb your first mortgage rateHELOC
A revolving line of credit secured by your home equity. Variable rate — draw and repay as needed over time.
Best when: you need ongoing flexibility on timing and amountsFrequently asked questions
Will a cash-out refinance increase my monthly payment?
Your new payment depends on the new loan amount, rate, and term. In some cases — especially if you're also securing a lower rate — your payment may not increase much even after cashing out. We'll always show you the exact numbers before you commit.
Is the cash from a cash-out refinance taxable?
Generally no — the cash you receive is loan proceeds, not income. However, interest deductibility rules depend on how you use the funds. Consult a tax advisor for guidance specific to your situation.
How much equity do I need?
For most conventional loans, you'll need to retain at least 20% equity after the cash-out. VA cash-out refinances have different guidelines and can allow higher loan-to-value ratios for eligible veterans. We'll tell you exactly what you qualify for based on your home's current value and existing balance.
Can I do a cash-out refinance if I have a second mortgage?
Yes, though it's more complex — the second mortgage lender typically needs to agree to subordinate their lien. We handle these situations regularly and will walk you through exactly what's involved.
Does it matter which state I'm in?
Texas has specific cash-out refinance rules under the state constitution — including a cap on fees and a mandatory 12-day waiting period. Michigan, Florida, and Arizona follow standard conventional guidelines. We know the rules in all four states and will make sure your transaction is structured correctly from the start.
Find out how much cash you can access
The first step is knowing how much equity you have — and how much of it you can tap. We'll run the numbers for your home, no cost, no obligation.
