Top Cash-Out Refinance Lenders of the Year 2025
In the realm of mortgage refinancing, two popular options stand out: cash-out refinancing and Home Equity Line of Credit (HELOC). Each has its unique advantages and disadvantages, making it essential to understand them before making a decision.
Cash-out refinancing, an alternative to cash-out refinancing, establishes a revolving source of funds with variable interest rates. This option offers fixed interest rates and fixed monthly payments, making it suitable for large, one-time expenses and mortgage term adjustments. However, it involves higher closing costs, a longer approval process, and requires stable income and a clear plan for the cash use.
On the other hand, a HELOC provides a revolving credit line with variable interest rates and more flexible borrowing and repayment options. HELOCs are ideal for ongoing or unpredictable expenses due to their flexibility. However, they can result in unpredictable payments due to variable interest rates and typically require at least 15% equity in the home.
Let's take a closer look at some of the major players in the market and their offerings:
PNC Bank offers cash-out refinance for conventional, jumbo, FHA, VA, and refinancing loans in all U.S. states. Their credit requirements are 620 for FHA, conventional, and jumbo loans; 640 for USDA loans. PNC Bank provides both online and in-person options to apply and allows tracking of applications online. However, their mobile app has limited functionality, and PNC Bank has not disclosed its J.D. Power rating for mortgage servicing.
Bank of America offers cash-out refinance for conventional, jumbo, FHA, VA, and refinancing loans, with a credit requirement of 620 for conventional loans. Bank of America does not offer USDA loans and has limited transparency around borrower requirements.
PenFed Credit Union offers the convenience of managing banking and mortgage with one provider and competitive rates. They provide cash-out refinance for conventional, jumbo, FHA, VA, and refinancing loans, with credit requirements of 620 for FHA loans, 650 for conventional loans, and 700 for jumbo loans.
SoFi offers cash-out refinance for conventional, jumbo, FHA, VA, and refinancing loans, with credit requirements of 620 for conventional loans, 600 for FHA loans, and 600 for VA loans. SoFi provides an option for up to $9,500 rebate if you work with a SoFi partner real estate agent and offers up to $10,000 to cover additional costs if the refinance does not close on time. However, SoFi's cash-out refinance is not available in Hawaii or New York for refinances.
Better offers mostly online services, with real-time online rates, three-minute preapprovals, and hybrid closings. They also offer a Price Guarantee that matches or beats competitor offers. Better's credit requirements are 580 for FHA loans, 620 for VA and conventional loans.
Chase offers cash-out refinance for conventional, jumbo, FHA, VA, and refinancing loans, with credit requirements of 620 for conventional loans, 640 for VA and FHA loans, and 680 for jumbo loans. They also offer a $5,000 closing guarantee. With 4,700 branch locations across the U.S., Chase provides a wide range of options for in-person assistance.
Navy Federal Credit Union offers cash-out refinance for conventional, jumbo, VA, and refinancing loans, but credit requirements are undisclosed. They allow up to two rate relocks and provide a rate-match guarantee or pay $1,000.
In conclusion, the choice between cash-out refinancing and HELOC depends on whether you want a lump sum with predictable payments and possibly a new mortgage (cash-out refinance) or flexible access to funds with some rate variability (HELOC). It's essential to carefully consider your financial needs, creditworthiness, and the terms offered by various providers before making a decision.
Cash-out refinancing and Home Equity Line of Credit (HELOC) are two popular investment opportunities in personal-finance and real-estate, each offering unique advantages depending on the individual's financial needs. For instance, cash-out refinancing may appeal to those seeking a lump sum with predictable payments and a fixed interest rate, ideal for large one-time expenses or mortgage term adjustments, while higher closing costs and a longer approval process apply. On the other hand, a HELOC provides flexible borrowing and repayment options with variable interest rates, suitable for ongoing or unpredictable expenses. However, it can result in unpredictable payments due to the variable rates and typically requires at least 15% equity in the home.
