Best Cash-Out Refinance Lenders

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The best cash-out refinance lenders let you pay off your original loan with fast closings, low fees and reasonable terms.

Your home may be your most valuable asset, but you can’t always access its cash value. However, that changes with a cash-out refinance, which lets you take out a larger mortgage and pay off your existing one, pocketing the difference. While this method doesn’t let you access your home equity directly, it gives you a lump sum for almost any purpose. Benzinga has selected the best cash-out refinance lenders to help you access the money you need.

Quick Winners List

• Best for Bank Statement Loans: Angel Oak Mortgage Solutions
• Best for Service: Rocket Mortgage (formerly Quicken Loans)
• Best for Veterans: Veterans United
• Best for a variety of options: loanDepot
• Best for Traditional Banks: Bank of America

Best for Bank Statement Loans: Angel Oak Mortgage Solutions

Pros

• Offers a wide range of non-QM loan products
• Flexible income verification options including bank statements and assets
• Loans available for foreign nationals and ITIN holders
• Dedicated loan officers for personalized service

Cons

• Limited availability in some states
• Higher interest rates compared to conventional loans

Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio non-QM loans. It is licensed in 45 states and offers competitive mortgage rates and quick closing times. The lender is not currently licensed to operate in New York.

Through its various programs, loans of $100,000 to $4 million are available, allowing you to finance properties of almost any value. They cater to primary residences, second homes and investment properties and accommodate various properties such as single-family homes, townhomes and condos.

Angel Oak offers self-employed individuals bank statement loans, HELOCs and P&L loans. It also provides opportunities for those with 1099 income and offers government loan products like FHA, USDA and VA loans.

Minimum credit score: 640

Minimum down payment: 5%

Loan types offered: Various non-QM loan programs

States served: All states except Alaska, New York, Vermont, Massachusetts and Connecticut

Best for Service: Rocket Mortgage (formerly Quicken Loans)

Pros

• Extensive customer service availability
• Government-backed and conventional loan options for home buyers
• Works with investors and people buying second homes
• Closing credits available

Cons

• No in-person service options
• No home equity loans or lines of credit

Rocket Mortgage® (formerly known as Quicken Loans) offers a user-friendly online platform that makes applying for a refinance a breeze. You can also access your application on-the-go using the Rocket Mortgage® app. Homebuyers can earn a credit for 1.25% of closing costs with a limit of $10,000.

Rocket has award-winning, easy-to-access customer service. You can talk to loan experts by phone or chat whenever you have questions. For new loans, phone lines are open until midnight Eastern during the week and into the evening on weekends. It offers cash-out refinances, rate and term refinances and refinances for investment properties.

It offers a robust learning center so you can learn more about the refinancing process and the platform accesses your financial preferences and goals to match you with the best loan for your needs.

Minimum credit score: 580

Minimum down payment: 0%

Loan types offered: Conventional, FHA, VA, jumbo, refinance

States served: All 50 states and D.C.

Best for Veterans: Veterans United

Pros

• 24/7 customer service
• Offers VA purchase and refinance loans
• Offers credit consulting through its Lighthouse Program
• Competitive refinance rates
• Largest VA home lender

Cons

• Branches in only 17 states
• No renovation loans
• No live chat

Veterans United specializes in VA loans and refinancing. Whether your branch of service is Army, Navy, Marine Corps, Coast Guard or any other area, Veterans United has you covered. It offers around-the-clock customer care, so you can reach them overseas.

Veterans United’s refinance offerings include interest rate reduction refinance loans (IRRRLs), which help you take advantage of lower interest rates and cash-out refinances. To use a VA refinance loan, you must be a qualified service member, veteran or surviving spouse.

Best for a Variety of Options: loanDepot

Pros

• Four term length options for FHA
• Strict “no steering” policy
• Good customer support
• Transparent fee structure
• Direct mortgage lender

Cons

• Rates not published on the website
• Some states may have prepayment penalties
• Rates and fees can be high in some cases

loanDepot is a non-bank direct mortgage lender. This structure allows it to originate and fund loans without using a middleman. By eliminating this extra step, loanDepot offers lower rates and faster approvals, making it one of the best mortgage refinance lenders.

When refinancing through loanDepot, you can choose from fixed- and adjustable-rate mortgages and FHA and VA loans. With an FHA loan, you can opt for terms of 10, 15, 20 or 30-year fixed rates. It has a “no steering” policy, meaning it won’t pressure you to choose a loan that isn’t the right fit. However, you must apply to find out what rates are available.

Best for Traditional Banks: Bank of America

Pros

• Wide range of mortgage products
• Strong digital tools, including a loan tracker
• Access to in-person customer service
• Discounts available through the Preferred Rewards program

Cons

• No USDA loans offered
• Preferred Rewards discounts require high account balances

Bank of America offers the best of both worlds – a digital mortgage application and in-person assistance from loan officers. As a large national bank, it gives you access to a strong set of digital tools such as the Home Loan Navigator for tracking your loan. You can view its rates online, which makes comparison shopping easier.

In addition, its Preferred Rewards program offers a discount to Bank of America customers with $20,000 or more in their checking accounts. With higher balances, you can qualify for bigger discounts. You can save $200 or more on your origination fees if you qualify. Bank of America offers FHA, VA, fixed-rate, adjustable-rate and cash-out refinances. 

What is a Cash-Out Refinance?

A cash-out refinance refers to applying for a new mortgage loan for more than you owe on your existing mortgage. The new mortgage pays off the existing one and you pocket the difference in cash. You then begin making payments on the new mortgage instead.

For instance, suppose you owe $150,000 on your mortgage and decide to apply for a cash-out refinance mortgage for $200,000. The new mortgage pays off the existing one and you pocket the remaining $50,000. Often, people use the money for home renovations, debt consolidation or other significant purchases.

However, a cash-out refinance loan typically works much the same as your original mortgage. This means there are usually closing costs such as origination and appraisal fees, underwriting, title services etc. If you don’t have cash to cover these costs, the amount you receive from the refinancing may be reduced.

How to Choose a Cash-Out Refinance Lender

As mentioned, a cash-out refinance loan works much the same as other mortgages, so choosing one is usually similar. A cash-out refinance can have numerous benefits. Still, choosing the right cash-out refinance lender can notably affect the overall experience.

Sarah DeFlorio, vice president of mortgage banking at William Raveis Mortgage, recommends working with a broker who can shop with many investors and lenders. “Many banks apply a ‘hit’ or increase to the rate for this type of product and can also limit loan-to-value or cash-out amounts, so it is important to shop the market broadly before deciding to apply,” DeFlorio says.

Here are some steps to take when choosing:

1. Compare interest rates and terms: Regardless of the mortgage type, rates and terms are always critical. One or two percentage points can make an enormous difference. Get quotes from multiple lenders and pay attention to APR and the repayment term. Paying longer often means more total interest even with a lower rate.

1. Check closing costs and fees: Closing costs can be a considerable upfront cost when getting a cash-out refinance. Research costs and fees for each lender including origination, appraisal, title and other closing costs.

1. Read customer service reviews: See what customers have to say about the company and its customer support on third-party review sites. Having a loan officer who lays out all the information you need to know while giving you updates about the loan’s progress is always preferable.

1. See if you qualify: Each lender has its own qualification criteria considering factors like credit scores, debt-to-income (DTI) and loan-to-value (LTV). These aren’t always published online, but many lenders let you prequalify.

1. Confirm cash-out refinancing limits: Lenders typically limit the equity you can tap into. Double-check that the loan amount you need will be available.

There are many factors to consider when choosing a mortgage broker. Matt Schwartz, founder of VA Loan Network, says low rates aren’t everything. “Those rates are often the lowest possible rate they could offer a borrower with perfect credit and an ideal situation,” Schwartz says.

His recommendation? Try shopping around. “Instead it is best to shop around with a handful of different lenders, both big and small, complete a loan application and get a loan estimate from each one showing a breakdown of the rate and fees,” Schwartz says this ensures you are getting the best deal.

Why You Should Trust Us

I started covering personal finance in 2018 and have contributed to several well-known personal finance publications. Finding the right cash-out refinance lender can be challenging, as lenders typically have rigorous criteria for this type of financing. I dug into the weeds researching leading cash-out refinance providers, zeroing in on those that offer competitive terms. I also consulted industry experts who helped me pinpoint the best available options.

Sarah DeFlorio, whom I interviewed for this piece, is a licensed mortgage broker who has teamed up with her mother to close over $870 in volume since joining William Raveis Mortgage in 2020. She is licensed in New York, New Jersey, Connecticut and Florida. Matt Schwartz, my other source, is cofounder of VA Loan Network, a company that guides veterans through the VA loan process.

Founded in 2010, Benzinga has established itself as a trusted authority on investing, insurance and mortgages including mortgage refinancing. Over 25 million readers rely on Benzinga for its consistent delivery of insightful, high-quality content.

Methodology 

I evaluated 23 mortgage lenders using Benzinga's comprehensive methodology to identify the best cash-out refinance lenders. Key factors that informed my rankings included interest rates and fees, product options and customer service ratings. Additionally, lenders that accommodate borrowers with lower credit scores received extra consideration, as this can open up options for a larger number of borrowers.

Independent reviews and ratings from real estate platforms like TrustPilot, BBB and Zillow were also important considerations. While no lender is perfect, those consistently earning strong reviews on multiple third-party sites stood out.

Recognizing the complexities of mortgage applications, I prioritized lenders offering straightforward application processes. Lenders providing a convenient online application scored higher, as ease of application is crucial when seeking a cash-out refinance for investment properties.

See Benzinga's full methodology for selecting the best mortgage lenders for a detailed explanation of our selection criteria.

Frequently Asked Questions

Sources

1. Programs Archive | Angel Oak Mortgage Solutions
2. What credit score do you need to buy a house? | Rocket Mortgage
3. How Much Do You Need For A Down Payment To Buy A House? | Rocket Mortgage
4. Find a Branch Near You | Veterans United Home Loans
5. Mortgage Refinancing: Home Refinancing, FAQs & More | loanDepot
6. FHA Loan Rates | loanDepot