Cash Out Refinance Credit Scores 2022

Before you refinance to get cash from your home’s equity, it is a good idea to know your credit score. That’s because your credit score is one of the factors that helps lenders like Freedom Mortgage determine if you qualify for a cash out refinance. Also, a higher score can sometimes help us offer you a lower interest rate on your refinance.

Like many lenders, we generally can’t approve homeowners for refinancing if your credit score is lower than our minimum requirement. But don’t let that discourage you from reaching out! Freedom Mortgage offers cash out options to customers with less-than-perfect credit scores, and you may be able to improve your credit faster than you think too.

Minimum credit scores for cash out refinances at Freedom Mortgage

At Freedom Mortgage, our minimum credit scores depend on the kind of loan you choose for your cash out refinance. These are our current minimums:

When you want a cash out refinance using a conventional loan, we can often accept a minimum credit score of 620.
When you want a VA loan cash out refinance, we can often accept a minimum credit score of 550.
When you want an FHA loan cash out refinance, we can often accept a minimum credit score of 550.

These minimum credit scores are lower than scores you may see required by other lenders. That’s because we want to help as many homeowners as possible access the value of their home’s equity to get cash for important investments like paying for home renovations or paying down higher-interest debts.

Other important information for cash out refinances

Keep in mind, your credit score is not the only number we consider when you want a cash out refinance. We’ll look at the bigger picture of your income and finances before we determine if you qualify. To do this we’ll ask you for documents like pay stubs, tax returns, and bank statements when you apply.

An important factor is the value of your home’s equity. You’ll need a substantial amount of home equity to get a cash out refinance. We may include a home appraisal as part of your application so we can estimate your home’s fair market value and how much equity you have available.

It’s important to understand your loan-to-value ratio (LTV). That’s because the maximum LTV of a cash out refinance has a big impact on the amount of money you may be able to borrow against your home’s equity. Knowing how much you can borrow helps you plan how to use your cash.

Finally, it’s a good idea to estimate your debt-to-income ratio (DTI). Your debt-to-income ratio helps you estimate if your total monthly debt payments, including your mortgage payment after refinancing, are affordable. Lenders like Freedom Mortgage often consider your DTI before determining if you qualify for a cash out refinance.