Cash-Out Refinance
Access your home equity as cash. Use it for home improvements, debt consolidation, college tuition, or any major expense. We'll find the best rate for your situation.
Start Here, It's Free
Step 1 of 9
How Cash-Out Refinancing Works in Michigan
A cash-out refinance replaces your existing mortgage with a new, larger loan and pays you the difference in cash. It is one of the most effective ways Michigan homeowners access the equity they have built — whether to fund home improvements, consolidate high-interest debt, cover education costs, or build an investment portfolio.
LTV Limits and How Much You Can Access
The amount you can cash out depends on your loan-to-value (LTV) ratio after the refinance. For conventional loans, most lenders allow a maximum LTV of 80%, meaning you must retain at least 20% equity in the home after the cash-out. For a home worth $400,000 with a $200,000 remaining balance, the maximum new loan would be $320,000 (80% of $400,000), giving you up to $120,000 in cash before closing costs. FHA cash-out refinances allow up to 80% LTV as well. VA cash-out refinances can go up to 90% LTV in some cases, making them particularly powerful for eligible veterans.
Credit and Income Requirements
Cash-out refinances have stricter requirements than rate-and-term refinances because the lender is increasing the loan amount. Most lenders require a minimum credit score of 620 for conventional cash-out refinances, with better rates available at 680 and above. Your debt-to-income ratio will be recalculated based on the new, higher loan amount, so your income must support the larger payment. Your loan officer will review your full financial picture to identify the best program and lender for your scenario.
Timing and Rate Considerations
Because a cash-out refinance replaces your existing mortgage, you will be taking on a new interest rate — which may be higher or lower than your current rate depending on market conditions. If your current rate is significantly below today's market rates, a cash-out refinance may increase your monthly payment even if you are getting a large sum of cash. In that scenario, a home equity line of credit (HELOC) or second mortgage may be a better alternative. Your mortgage broker can model both options so you can make an informed decision.
Frequently Asked Questions
How much equity can I cash out?
Most conventional cash-out refinances allow you to borrow up to 80% of your home's value, meaning you must retain at least 20% equity. VA cash-out refinances may allow up to 90% LTV. Your loan officer will calculate the exact maximum based on your home's current value and remaining balance.
What can I use the cash for?
There are no restrictions on how you use the cash from a cash-out refinance. Common uses include home improvements, debt consolidation, education expenses, investment property down payments, and emergency reserves.
How does a cash-out refi affect my rate?
Your new rate will be based on current market conditions, your credit score, and the new LTV. Cash-out refinances typically carry a slightly higher rate than rate-and-term refinances due to the increased loan amount and lender risk.
How long do I need to own my home before cashing out?
For most conventional cash-out refinances, you must have owned the home for at least 6 months. FHA requires 12 months of ownership. VA cash-out refinances require that you have made at least 6 consecutive on-time payments on your current VA loan.
Why Michigan Mortgage Solutions?
We've been helping Michigan families achieve homeownership since 1999. Here's what sets us apart.
Practice Purchase™ System
Our exclusive process lets you simulate your mortgage before you commit, no risk, no hard credit pull.
Expert Team of 5 Loan Officers
From first-time buyers to seasoned investors, our specialists match you with the right expert for your situation.
Same-Day Approvals Available
Get a verified pre-approval letter the same day in many cases, so you can make competitive offers with confidence.
Access to 50+ Lenders
As a broker, we shop your loan across dozens of lenders to find the best rate and terms, not just one bank's products.
Specialty & Hard-to-Place Loans
Self-employed? Low credit? High DTI? ITIN? We have programs for borrowers other lenders turn away.
Step-by-Step Guidance
We guide you from first conversation to closing day, no guesswork, no surprises, just clear communication.
What Our Clients Are Saying
275+ five-star reviews from homebuyers, homeowners, and investors across Michigan.
"Trevor and the team at Michigan Mortgage Solutions made buying our first home so easy. They walked us through every step and got us a rate we couldn't believe. Highly recommend!"
"I was self-employed and thought getting a mortgage would be a nightmare. Jason found us a bank statement loan that worked perfectly. Closed in 28 days!"
Ready to Get Started?
Get your free mortgage consultation today. No hard credit pull. No obligation.