Someone with $180,000 of equity and a 648 credit score can usually get a cash-out refinance approved. That same homeowner at 742 gets a nearly identical loan for roughly half a point less in interest. On a $300,000 balance, half a point is about $90 a month, every month, for thirty years.
Credit is the most controllable input in that math. Lenders publish minimums, but the minimum and the price you actually pay are two different conversations. Here’s how the two connect.
The Minimum Credit Score for a Cash-Out Refinance, Loan by Loan
There is no single national cutoff. Each program sets its own floor, and individual lenders layer stricter rules on top of it.
- Conventional (Fannie Mae and Freddie Mac): 620 minimum, with a standard maximum loan-to-value of 80% on a primary residence. Plenty of lenders quietly require 640 or 660 for cash-out specifically.
- FHA: 500 gets you a cash-out at 80% LTV; 580 and above unlocks 85%. FHA also wants you to have owned the home for at least 12 months.
- VA: The VA itself doesn’t publish a score floor. Lenders set their own, usually 620, and VA cash-out can run to 100% LTV.
- Jumbo: 700 to 720 is the common entry point. Some banks want 740 plus six months of reserves in the bank.
A credit union two towns over may approve a conventional cash-out at 600 while a national bank declines the same file at 660. That gap is real, and it’s a good reason to check the minimum credit score to refinance a mortgage, loan by loan before you assume a number rules you out.
Why a Cash-Out Gets Priced Harsher Than a Rate-and-Term Refi
When you refinance just to lower the rate, the lender’s risk barely changes. You still owe roughly what you owed before. A cash-out is different: the loan balance grows, the equity cushion shrinks, and the lender is exposed to more loss if home values slip or you stop paying.
Two things follow from that. First, pricing adjustments. Fannie and Freddie add a loan-level fee for cash-out loans that typically runs somewhere between three-quarters and 1.25 points of the loan amount, depending on LTV. Second, credit overlays. A 640 that’s fine for a rate-and-term refinance may not clear a lender’s cash-out threshold at all.
So the same score can be worth less on a cash-out than it is on other refinance types. That’s not a reason to give up on the loan. It’s a reason to know exactly where your score sits before you start.
The Score Bands That Actually Move Your Payment
Above the minimum, score affects price in steps rather than a smooth curve. Breakpoints cluster at 620, 640, 660, 680, 700, 720, 740, and 760. Crossing one matters. Going from 739 to 741 can be worth more than going from 700 to 720.
A rough picture of what that looks like in practice on a $300,000 conventional cash-out at 80% LTV:
- 620 to 639: the most expensive tier. Some lenders won’t lend here at all on a cash-out.
- 640 to 679: typically 0.75% to 1.25% above the best advertised rate.
- 680 to 719: about 0.375% to 0.625% above best.
- 720 to 759: close to advertised pricing.
- 760 and up: the rate you see on the marketing page is built for this tier.
Translate that into cash. A borrower at 665 might be quoted 7.25% while a neighbor with the identical house, income, and loan amount gets 6.75%. On $300,000, that’s $100 a month and roughly $36,000 in extra interest over the life of the loan. This is why spending six weeks on your credit before applying often beats spending six weeks shopping.
Your Score Is Only One of Five Things Underwriters Weigh
Plenty of people with a 700 get turned down for a cash-out, and plenty with a 640 get approved. Score is a filter, not the decision. Underwriters care about how much equity survives the loan, how much of your income goes out the door each month, whether you have reserves, and whether there’s anything ugly in the last two years.
A 30-day late payment from 18 months ago hurts more than a collection from 2019, even though the collection sounds scarier. And a 680 with 45% debt-to-income is a weaker file than a 660 at 28%. The five things underwriters actually check on a cash-out refinance are worth reading before you hand over an application fee, because two of them have nothing to do with credit at all.
If You’re Sitting Between 620 and 680, Fix These First
The fastest gains almost always come from credit card balances, not from old collections. Utilization is recalculated every time a statement cuts, so paying a card down from 70% to 20% of its limit can add 30 to 50 points within one billing cycle. Disputing a genuine reporting error takes 30 to 45 days and can be worth just as much.
What not to do: open a new card to “build mix,” close an old account you’ve had for a decade, or finance a car three months before applying. Each of those can knock points off right when you need them. A practical order of operations lives in how to improve your credit before refinancing without wasting three months, and most of it costs nothing.
One detail people miss: mortgage lenders don’t pull the score you see in a consumer app. They pull FICO models 2, 4, and 5, and they use the middle of your three scores. Your free score can read 715 while your mortgage middle score is 692. Get the right numbers before you make plans around the wrong ones.
The Rate Quote Is Only as Good as the Lender Behind It
A 680 score doesn’t produce one rate. It produces a range, and where you land in that range depends heavily on which lender you call. Banks price cash-out conservatively because they keep the loans. Mortgage brokers and non-bank lenders often have more room, especially in the 640 to 700 band. Getting three quotes on the same day with the same loan amount is the only honest comparison, since what lenders are really quoting on cash-out refinances shifts with the market and with the fine print behind the headline number.
Ask each one for the rate plus points, the lender fees, and the total closing costs on a Loan Estimate. The lowest rate with 2 points attached is often more expensive than a slightly higher rate with none.
Run the Break-Even Before You Sign Anything
Cash-out refinances cost real money to originate, usually 2% to 5% of the loan amount once lender fees, title, appraisal, and recording are added up. If you’re pulling out $50,000 to renovate a kitchen, that cost is part of the project budget. If you’re pulling out $20,000 to consolidate credit cards, the math has to beat the interest you’re escaping.
Work out the monthly saving, divide the total closing costs by it, and you get the number of months before you break even. A cash-out refinance calculator will do the arithmetic, but the input that matters most is the new rate you’ll actually qualify for, which brings you back to your score.
When a Cash-Out Refi Is the Wrong Tool
If your middle score is under about 640 and you don’t need the money urgently, waiting three to six months is usually the higher-return move. Consolidating $30,000 of card debt at 22% into a mortgage at 7.5% sounds like a win until you stretch the repayment over 30 years and pay closing costs on top. A home equity loan or HELOC keeps your existing first mortgage rate intact and often prices better for mid-range credit.
And if the cash-out is funding a depreciating purchase rather than debt at a higher rate or a home improvement that adds value, the equity you’re spending is the cheapest money you’ll ever have. Spending it on a car is a decision worth sleeping on for a week.
Pull Your Mortgage Scores Before Anyone Else Does
Before you call a lender, ask a broker for a soft-pull mortgage credit review. It takes about ten minutes, it doesn’t affect your scores, and it shows the three FICO versions lenders will actually use along with every tradeline behind them. You’ll see whether you’re at 678 or 702, which is the difference between waiting one billing cycle and applying today.
Bring the report to the conversation with a target: the score band that gets you the pricing you want, and a realistic timeline for reaching it. Most homeowners who do this find they’re one card payment away from a better tier. That payment is cheaper than the rate they’d otherwise lock in for the next thirty years.