Best FHA Cash Out Refi Lenders

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Contributor, Benzinga
October 26, 2023

When interest rates fall or when the equity you have built in your home becomes substantial, a cash-out refinance could make sense. Not only does a cash-out refinance allow you to access a lower interest rate and possibly lower your monthly payment on your home loan, it can also provide you with a quick injection of cash you can use to cover debt or fund any type of project. 

But not every lender that offers FHA loans also offers FHA cash-out refi options. Read on to learn more about FHA cash-out options and some advantages to using certain lenders depending on your situation.

Best FHA Cash-Out Refi Lenders

As is the case with any real estate transaction, you should always examine your options to find the right financial partner for your situation. When refinancing an FHA loan, you don’t need to work with the same lender that offered your original loan. If you’re unsatisfied with your current lender, you might want to consider refinancing with one of Benzinga’s favorites below. 

Optimal for Online Mortgages: Rocket Mortgage

Rocket Mortgage LLC not only offers an FHA cash-out refinance, but it’s also the largest mortgage lender in the country and offers most types of loans through an all-online system. Rocket Mortgage’s home loans are offered exclusively online, and its application process is typically much simpler than its competitors. You can get a quote, submit your mortgage application and obtain financing exclusively online.

One disadvantage of Rocket when it comes to an FHA cash-out refi is that the credit requirement is slightly higher than the minimum for FHA loans. Typically, borrowers can qualify for FHA loans with a 500 credit score, but this company requires 580. If you meet the qualifications and value a simple mortgage process, Rocket Mortgage can be one of the best FHA cash-out refi lenders


  • Makes the online mortgage hunting process much simpler
  • Backed by Quicken Loans, giving you peace of mind
  • Low minimum credit score for some mortgage products makes the platform available for more consumers


  • While you can cash out a refi, remember that you still need to pay back all that money at some point

Best for Personalized Service: Guaranteed Rate

Guaranteed Rate is another large, nationwide mortgage lender that offers an FHA cash-out program. Like Rocket, it offers an online mortgage option and has a slightly higher-than-usual credit score requirement. While you’ll need a score of at least 620, Guaranteed Rate offers options to provide you with a more flexible buying process.

If you prefer an in-person consultation, Guaranteed Rate has branches in almost every state, and there is likely one near you. If talking to a person is important, and you still want the credibility and simplicity that comes with using a national lender, Guaranteed Rate should be on your list of possible lenders.


  • Local branches allow you to get an in-person consult, if you feel that would be best
  • You can complete much of the mortgage process online to save time
  • The platform has nationwide coverage, meaning they are a good alternative no matter where you live


  • Minimum credit score on the platform might be a little high for some borrowers

Best for Little to No Credit Check: AmeriSave

AmeriSave Mortgage Corp. is licensed in 49 states and has almost 20 years of lending experience. The company has already financed almost 400,000 homes and offers an FHA refinancing program. Another technology-forward company, AmeriSave allows buyers to receive a rate quote online. While that isn’t unique, the fact that they do so without checking credit is, and that’s a big perk when you are trying to weigh your options. With quick closing available and competitive rates, AmeriSave is another reputable lender for your FHA cash-out refinance.


  • Licensed in 49 of 50 states, giving the firm range that many lenders simply do not have
  • Online rate quotes give you an idea of what you can afford and what is offered at the time


  • AmeriSave may not have the range of options that some borrowers require

Best for Refinancing: New American Funding

New American Funding offers cash-out refinances alongside a variety of other mortgage products. With branches in 33 states, it’s not always possible to meet someone face-to-face, but New American offers transparency in its rates. 

Any rates from New American are readily available on its website, so if you’re shopping for the right lender, the company makes it easy to see what kind of rate you could receive. A word of caution, though: New American typically displays rates that are offered to only their best borrowers (those with close to perfect credit) so beware that if your credit is not as good you might not receive that rate. Still, New American should be on your list of sites to visit to see its FHA refinance rates to get a feel for what your rate could be.


  • Transparent rates from partners help you get an even broader idea of what is out there
  • The platform offers a robust level of customer care for everyone


  • Because the platform is only available in 33 states, you might not be able to avail yourself of their loan products
  • Rates displayed on the site may only be for those with perfect credit, so you may need to dig deeper to find what you will pay

What Is a Cash-Out Refi?

Cash-out refinances allow you to access the equity you have built into your home. A cash-out refinance allows you to take out a portion of the money you’ve paid to your bank in the form of premiums. When you take a cash-out refinance, you replace your current mortgage loan with a loan that has a higher value, and your lender provides you the difference in cash. 

For example, if your currently outstanding home loan is valued at $200,000 and you need $2,000 to cover debt, you might take a cash-out refinance loan and accept a loan with a value of $202,000. The lender would then provide you with $2,000 in cash at closing. Most lenders will require that 20% of the property’s value remains in a new loan. If you currently have 30% equity in a home, then you can cash out that extra 10% by creating a new loan. 

Cash-out refinances can be a saving grace for people with excessive credit card debt. You can cash out and use the proceeds to pay off other debts. Or maybe you have a large renovation project to undertake, or you want to invest in a business. The great thing about a cash-out refinance is that you can use the money however you see fit.

What Is Home Equity?

Home equity, not to be confused with a home equity loan or a home equity line of credit, is the amount of financial interest you have in your home. Put more simply, it is the difference in what your home is worth and what you owe.

In a cash-out refinance, you gain immediate access to that difference in value. If your property value goes up over time, you can cash out on the new value and potentially gain a larger lump sum. When you do this, though, you are assuming a new and larger loan with larger payments and a new payment period. 

How Much Does an FHA Cash-Out Refinance Cost?

The cost of an FHA cash-out refinance can vary based on several factors. Some potential costs to consider include the upfront mortgage insurance premium (MIP), which is typically 1.75% of the loan amount. There may also be closing costs, which can include appraisal fees, title search and insurance fees, loan origination fees, and other administrative fees. Additionally, there may be fees associated with FHA requirements, such as credit report fees, flood certification fees, and mortgage recording fees.

How to Qualify for an FHA Cash-Out Refi?

To qualify for an FHA cash-out refinance, there are several requirements that need to be met. You must have the following:

  • Existing FHA-insured mortgage
  • A minimum credit score of 500
  • At least six mortgage payments on your current FHA loan
  • Current on your mortgage payments with no late payments within the past 12 months
  • Sufficient amount of equity in the home, typically at least 15% to 20%
  • The property must be your primary residence
  • Debt-to-income ratio that is within acceptable limits, typically around 43% or lower

How to Apply for an FHA Cash-Out Refi?

To apply for an FHA cash-out refinance, you will need to follow a few steps. First, you should gather all the necessary documents, including proof of income, bank statements, and tax returns. You should also obtain a current appraisal of your property to determine its value.

Next, you can contact a lender that offers FHA loans and inquire about their specific application process. They will guide you through the necessary forms and paperwork required for the refinance.

It is important to make sure you meet the eligibility criteria for an FHA cash-out refinance, which usually involves having a certain amount of equity in your home and meeting credit score requirements.

Once you have completed the application and provided all the necessary documentation, the lender will review your information and make a decision on whether or not to approve your refinance request.

Benefits of an FHA Cash-Out Refi

A cash-out refi can help you in a number of ways, especially if you need to pay down debt. Some of the biggest benefits you may be able to take advantage of with a cash-out refinance include: 

More Affordable Borrowing

Mortgage interest rates are usually significantly lower than the interest rate you’ll find on a credit card or personal loan. If you need to pay down debt, you can use a cash-out refinance to replace high-interest debt with additional money added to your home loan at a more affordable interest rate. 

No Limits on Use

Unlike some types of loans, there are no limitations on how you can use the money from a cash-out refinance. From paying off a credit card to funding your dream vacations, you can use the money from a cash-out refinance for anything. 

May Be Able to Access More Affordable Rates

If interest rates are lower now than they were when you first got your loan, you may be able to refinance to a lower rate when you take money out of your home. This provides you with funds now and lower payments down the line. 

Considerations With an FHA Cash-Out Refi

While there are certainly advantages to a cash-out refinance depending on your situation, there are things you should consider before committing to an entirely new loan. 

Lender Fees

Any time you refinance, whether you are cashing out or not, you’ll need to pay closing costs. Shop for the best rates and the lowest fees so you can net as much as possible from cashing out.

New and Larger Debt

Sometimes, it makes sense to cash out if you need the money or have a great investment opportunity. It’s important to remember that when you refinance, you start the clock on your loan again, typically with another 15- or 30-year term. If your home went up in value, you can receive more cash, but you’re also committing to a larger loan amount.

Mortgage Insurance

If you now have 20% equity in your home and you want to get rid of the FHA’s mortgage insurance requirement, you’ll need to refinance to a conventional loan. FHA loans do not allow you to remove insurance once you reach 20% equity like conventional loans. 

Choose the Best FHA Cash Out Refi Lender

Finding the best FHA cash-out refi lenders is crucial for you who are looking to leverage your home equity and access funds for various purposes. By conducting thorough research and considering factors such as interest rates, fees, customer reviews, and lender reputation, you can make an informed decision and choose a lender that meets your specific needs.

Frequently Asked Questions


What is the maximum cash-out refinance for an FHA loan?


Any time you do a cash-out refinance you must leave 20% equity in the home. The maximum cash-out amount would be whatever equity you have minus 20% of the home value and any closing costs.


How long do I have to wait for an FHA cash-out refinance?


You can refinance an FHA loan 210 days after closing, but in most cases for an FHA refinance you need to have owned the home for one year.


Can I use the cash from a cash-out refi for any purpose?


Yes, you have the freedom to use the cash for various purposes. Many homeowners use it for renovations, paying off high-interest debts, funding education, or even starting a business. However, it’s essential to use the funds responsibly and not overspend.

Get Ready for Take Off

Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.

You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.