Cash-Out Refinance: Turning Home Equity Into Capital
If you've built up equity in a home or investment property, a cash-out refinance lets you convert part of that equity into cash — without selling the property — by refinancing into a new, larger loan and taking the difference at closing.
What people use it for
Common uses include funding a renovation, consolidating higher-interest debt, covering a major expense, or pulling capital out to reinvest — in a business, in another property, or elsewhere. Because the funds come from your own equity, there's no restriction on how you use them.
Cash-out refinancing for investment properties
Real estate investors use cash-out refinancing to pull equity out of one property and redeploy it into the next acquisition. On a rental property, this can often be done through a DSCR cash-out refinance, qualifying on the property's rental income rather than personal income — useful for investors scaling a portfolio without personal income documentation at each step.
Self-employed and non-QM cash-out options
If you're self-employed, a cash-out refinance doesn't require a conventional-only path. Sky Capital's non-QM programs — bank statement, P&L-only, and asset-based options covered in our self-employed mortgage options guide — can all be structured as a cash-out refinance, not just a purchase.
What to weigh before refinancing
A cash-out refinance replaces your existing loan terms, so it's worth comparing your new rate and payment against what you're actually trying to accomplish with the cash. For many borrowers it's the cheapest form of capital available; for others, a second-lien or bridge option may make more sense for a shorter-term need.
Have equity you want to put to work?