Leading cash-out refinance loan providers in the year 2025
In the ever-evolving world of home finance, cash-out refinancing continues to be a popular choice for homeowners seeking to access funds for various purposes. Here's a roundup of some of the top lenders offering cash-out refinance services and their key features.
PNC Bank
PNC Bank, with operations in all U.S. states, offers cash-out refinance for conventional, jumbo, FHA, VA, USDA, and refinancing loans. Their application process can be tracked online, and credit requirements are 620 for FHA, conventional, and jumbo loans; 640 for USDA loans. However, it's worth noting that PNC Bank does not have a mobile app with extensive functionality.
SoFi
SoFi, an online lender, offers cash-out refinance for conventional, jumbo, FHA, VA, and refinancing loans. SoFi's credit requirements are 600 for VA and FHA loans; 620 for conventional loans. Notably, SoFi does not offer USDA loans and operates online only, with no branch locations. SoFi also offers up to $9,500 rebate if you work with a SoFi partner real estate agent.
PenFed Credit Union
PenFed Credit Union offers cash-out refinance for conventional, jumbo, FHA, VA, and refinancing loans. They pride themselves on competitive rates and allow managing banking and mortgage with one provider. Credit requirements are 620 for FHA loans, 650 for conventional loans, and 700 for jumbo loans.
Bank of America
Bank of America, with operations in all U.S. states, offers grant programs for low- and moderate-income buyers in addition to cash-out refinance for conventional, jumbo, FHA, VA, and refinancing loans. Their credit requirements are 620 for conventional loans.
Navy Federal Credit Union
Navy Federal Credit Union requires membership to borrow and allows up to two rate relocks. They offer cash-out refinance for conventional, jumbo, VA, and refinancing loans, though credit requirements are undisclosed.
Chase
Chase, with over 4,700 branch locations across the U.S., offers cash-out refinance for conventional, jumbo, FHA, VA, and refinancing loans. Their credit requirements are 620 for conventional loans, 640 for VA and FHA loans, and 680 for jumbo loans.
Better
Better, an online lender, offers cash-out refinance for conventional, FHA, VA, and refinancing loans. Their credit requirements are 580 for FHA loans, 620 for VA and conventional loans. Better is known for its real-time online rates, three-minute preapprovals, and hybrid closings.
The pros and cons of cash-out refinancing for homeowners in 2025 are as follows:
Pros:
- Potentially lower interest rates: Homeowners may secure a lower mortgage rate compared to their original loan, especially if rates were higher when they bought their home.
- Single loan payment: Unlike home equity lines of credit or second mortgages, cash-out refinance consolidates debt into one monthly payment.
- Access to more funds: It allows borrowing a large sum, useful for major expenses like home renovations, education, or debt consolidation.
- Debt consolidation benefits: Paying off high-interest credit cards or other debt can save money and improve credit utilization, potentially boosting credit scores.
- Refinance flexibility: Homeowners can reset loan terms (e.g., to 30 years), potentially lowering monthly payments even with a higher loan balance.
Cons:
- Using your home as collateral: If you cannot keep up with payments, you risk foreclosure because your home backs the loan.
- Higher interest rates than standard refinance: Cash-out refinance rates typically run 0.125% to 0.5% higher than rate-and-term refinances.
- Starting a new long-term loan: May extend your mortgage term and increase total interest paid over time.
- Not ideal for short-term or non-essential spending: Financial experts warn against using borrowed equity for vacations or cars since it increases long-term debt.
- Qualification requirements: You need sufficient home equity and typically have credit score and income criteria to meet.
In summary, cash-out refinancing in 2025 can be a smart financial tool for homeowners who want to access large sums of cash at favorable interest rates or consolidate debt, but it involves risks related to increased mortgage debt and use of the home as collateral. It is most suitable for long-term investments or essential expenses rather than short-term wants.
The use of cash-out refinancing can positively impact personal finance and lifestyle, allowing homeowners to access funds for home-and-garden improvements, education, debt consolidation, or other significant expenses. For instance, PNC Bank offers a wide range of cash-out refinance options for various loans, while SoFi provides a rebate when working with a SoFi partner real estate agent. In contrast, Better is known for its quick preapprovals and real-time online rates. However, it's crucial to consider the potential downsides, such as increased debt, higher interest rates, and the risk of foreclosure, before making a decision. By carefully evaluating one's financial standing and long-term goals, homeowners can make informed choices about whether cash-out refinancing is a sensible investment in their personal-finance and lifestyle.
