How Long Must You Own a Home Before Getting a Cash-Out Refinance?

In most cases, you’re required to own your home for a set amount of time before qualifying for a cash-out refinance. The waiting period can vary depending on your lender and program.

Following are guidelines on how long you must own a home to get a cash-out refinance on it, and a few situations in which there’s no waiting period at all.

Conventional Cash-Out Refinance Ownership Requirements

You must own your home for at least six months to be eligible for a conventional cash-out refinance. More specifically, at least one borrower needs to have been on the title for the six-month minimum.

However, if the property has an existing mortgage, that loan needs to be at least 12 months old. First-lien HELOCs and home equity loans are excluded from the rule. But generally, if you take out a mortgage to purchase a home, it will be one year before you’re eligible for a cash-out refinance.

But what if you were recently added to a property?

You could immediately apply for a cash-out refinance if your co-borrower has been on title for six months. If you want to refinance the mortgage into your name only, you’ll need to wait six months.

Note: Conventional lenders allow for cash-out refinances on primary residences, second homes, and investment properties. FHA and VA cash-out refinances are limited to primary residences only.

Exceptions to Conventional Ownership Requirements

Conventional guidelines cut a few exceptions to the six-month ownership requirement for borrowers in certain situations.

Delayed Financing

The delayed financing rule allows some homeowners who purchased their property in cash – without the use of a mortgage – to qualify for a cash-out refinance immediately. Delayed financing is common among investors but can be used by regular buyers on primary residences and second homes as well.

Inheritance

If you’ve recently inherited a home, you are eligible for a cash-out refinance right away. You do not need to own the property for six months to qualify.

Court-Awarded Properties

Properties that have been court-awarded as part of a divorce, separation, or the dissolution of a domestic partnership are eligible for a cash-out refinance without the six-month waiting period.

Properties Previously Owned by Your LLC or Trust

Have you personally taken title to a property from an LLC that you have majority control of or an inter vivos revocable trust that you're the primary beneficiary of? You can count the time owned by the LLC or trust towards your six-month ownership requirement.

For Example: If a property purchased by your trust four months ago gets transferred into your individual ownership, you would only need to wait two more months to be eligible for a conventional cash-out refinance, not six months from the ownership transfer.

FHA Cash-Out Refinance Ownership Requirements

For an FHA cash-out refinance, at least one borrower must have owned and occupied the property for a minimum of 12 months prior to closing.

This requirement doesn't apply to inherited properties unless the home has been rented out since being inherited. In that case, the owner would need to occupy the premises as their primary residence for at least one year to be eligible for an FHA refinance.

VA Cash-Out Refinance Ownership Requirements

VA guidelines don’t have any set requirement for ownership length when refinancing. However, existing VA loans must be at least 210 days old to be eligible for a cash-out refinance. The borrower must also certify that the property is their primary residence at the time of the refinance.

Other Lender Requirements for Cash-Out Refinances

There's more to getting a cash-out refinance than just fulfilling ownership requirements. You will still need to meet standard lending guidelines to be eligible for a loan.

Conventional

Conventional loans are the most popular type of cash-out refinance. They are generally where you'll find the best value for borrowers with good or excellent credit who meet conventional refinance guidelines.

FHA

FHA loans are available to borrowers with higher debt or a lower credit score than conventional mortgages. For homeowners with credit issues, FHA cash-out refinances are a good option. However, expect to pay a mortgage insurance premium with an upfront fee of 1.75%.

*Some FHA lenders may require a higher minimum credit score.

VA

VA loans are available to borrowers who have served in the US armed forces (including their dependents in some situations) and qualify for a VA Certificate of Eligibility. VA refinances allow you to cash out up to 100% of your home’s equity and can provide great value for eligible borrowers. Most VA cash-out refinances come with a 3.3% funding fee.

*VA guidelines set no minimum credit score or maximum debt-to-income, but lender-specific minimums are typically in this range.

Frequently Asked Questions About Ownership Requirements

Here are some frequently asked questions about the ownership requirements for getting a cash-out refinance loan.

How Long Do I Have to Own My Home to Qualify for a VA Cash-Out Refinance?

The VA sets no minimum ownership requirement when qualifying for a cash-out refinance. However, existing VA loans need to be at least 210 days old. Still, as VA loans are typically assumable, there may be situations where eligible borrowers could do a cash-out refinance on a recently purchased property with an assumed loan.

Do Second Mortgages Need to Be 12 Months Old to Refinance?

No! Conventional guidelines only require your first mortgage to be 12 months old. This requirement doesn't apply to any second mortgages being paid off, such as a home equity loan or line of credit.

What if I Have a First-Lien HELOC That Is Less Than a Year Old?

If your first mortgage is a HELOC, you’re eligible for a cash-out refinance even if the loan is less than a year old. Freddie Mac guidelines explicitly state that the 12-month seasoning rule does not apply when the first-lien mortgage being refinanced is a HELOC.

Which Cash-Out Refinance Programs Do I Qualify For?

In most cases, you can only refinance a mortgage once you've been on the title for at least six months. However, some exceptions exist, including if you purchased the property with cash and qualify for delayed financing. If you inherited the property or were awarded it by the court, you may also be eligible sooner.

Apply with an experienced lending professional to find out which cash-out refinance programs you currently qualify for.