If you're a Veteran sitting on home equity and wondering which lender to trust with a VA cash-out refinance, the short answer is: it depends on what you value most. The highest-rated VA cash-out refinance lenders in 2026 differ in terms of credit flexibility, LTV allowances, rate competitiveness, and customer experience. This guide breaks down what to look for and how to make a confident decision.
What Is a VA Cash-Out Refinance?
A VA cash-out refinance replaces your existing mortgage with a new VA-backed loan for a higher amount, and you keep the difference. It's one of the most Veteran-friendly financial tools in housing because it works with any existing loan type from VA, FHA, or conventional, as long as you have VA eligibility.
According to the U.S. Department of Veterans Affairs, eligible Veterans can use the proceeds for virtually any purpose: paying off high-interest debt, funding home improvements, covering education costs, or building a cash reserve.
A few things make a VA cash-out refinance loan stand apart from conventional cash-out options:
- No private mortgage insurance (PMI): VA loans don't require PMI, even at high loan-to-value ratios, which can mean real monthly savings.
- Higher Loan-to-Value (LTV) ceiling: VA program guidelines allow up to 100% LTV, although many lenders apply overlays and cap at 90–95% in practice.
A VA cash-out refinance is a full underwrite, not a streamline. That means an appraisal, full income documentation, and a complete credit review are required.
What Sets the Highest-Rated Lenders Apart
Not all VA lenders offer the same product, and "highest-rated" means different things to different Veterans. When evaluating lenders, four factors tend to matter most:
Customer experience and transparency: Processing times, loan officer responsiveness, and clear disclosure of all costs are all part of the equation.
LTV flexibility: VA program rules allow 100% LTV, but individual lenders may cap at 90–95%. For Veterans needing to access more equity, this can make a real difference.
Lenders That Consistently Earn High Marks
NewDay USA
NewDay USA is a VA-specialized lender with a single focus: serving Veterans and military families. Unlike generalist lenders who offer VA loans alongside dozens of other products, NewDay USA is built around Veterans.
For example, the NewDay 100 VA Cash-Out Refi is structured to help Veterans access their home equity without requiring upfront cash at closing, which makes it a potentially fantastic tool for Veterans who want to refinance without drawing down cash reserves.
NewDay USA's focus on the VA loan market means loan officers tend to have deeper familiarity with the nuances that VA borrowers face, and documentation requirements that differ from conventional underwriting.
Pennymac
CNBC Select ranked Pennymac among the country’s largest VA mortgage lenders in 2024, with 8,883 VA loans and $3.07 billion in VA loan volume.
PenFed Credit Union
Bankrate says Pentagon Federal Credit Union (PenFed) is available in all U.S. states and offers VA refinancing options, including cash-out refinancing and VA streamline refinancing.
Carrington Mortgage Services
Carrington Mortgage Services is a nonbank mortgage lender that offers VA loans.
The VA Funding Fee: What Veterans Need to Know
The VA funding fee is a one-time, per-loan charge at closing that helps keep the VA home loan program self-sustaining without requiring taxpayer support. For a cash-out refinance, the funding fee is 2.15% of the new loan amount for first-time VA loan users, and 3.30% for subsequent use.
This fee can be rolled into the loan rather than paid up front, which many Veterans choose to do. Rolling it in keeps out-of-pocket costs low at closing, but it increases the loan balance and total interest paid over time.
The fee is waived entirely for Veterans who receive VA compensation for a service-connected disability, for surviving spouses receiving Dependency and Indemnity Compensation (DIC), and for active-duty service members who have received or been proposed for a Purple Heart.
Eligibility: Who Qualifies for a VA Cash-Out Refinance
To pursue a VA cash-out refinance, Veterans usually need to meet the following requirements:
Veterans with full entitlement have no VA-imposed cap on how much you can borrow through a cash-out refinance. For Veterans with partial entitlement, the VA's guaranty is tied to the 2026 conforming loan limit of $806,500 in most counties, which may affect how much you can access without a down payment.
How Much Can You Access?
As of the end of 2025, homeowners with mortgages held a collective $17 trillion in equity, according to Cotality, leaving the average borrower with about $295,000 in home equity. Veterans who have owned their homes for several years and watched values appreciate are often in a strong position to tap equity through a cash-out refinance.
The math works like this: if your home is appraised at $400,000 and you owe $250,000, a lender allowing 90% LTV would cap your new loan at $360,000, meaning you could access up to $110,000 in cash, minus closing costs and the funding fee. The actual net amount depends on the full cost structure of the deal.
One thing to watch: because the VA cash-out refinance is a full refinance, your new monthly payment will reflect the full new loan balance at current rates. It's worth confirming the new payment comfortably fits your budget.
How to Compare Lenders: A Checklist
When comparing VA cash-out refinance lenders, look at:
- The quoted interest rate and APR (the APR accounts for lender fees and gives a fuller picture)
- Whether the lender allows 90%, 95%, or 100% LTV
- Minimum credit score required for VA cash-out specifically
- Estimated time from application to close
- Who services the loan after closing
Ready to learn more about using your VA home loan benefit? Explore your options.
FAQs
Can I do a VA cash-out refinance if my current mortgage is not a VA loan?
Yes. The VA cash-out refinance works with any existing mortgage type. You just need to meet VA and lender eligibility requirements and have the property as your primary residence.
Is there a maximum loan amount for a VA cash-out refinance?
Veterans with full entitlement have no VA-imposed loan limit. However, lenders still evaluate your ability to repay, and lender overlays on LTV affect how much equity you can access. NewDay USA offers 100% LTV to Veterans who meet specific criteria.
What credit score do I need for a VA cash-out refinance?
The VA itself doesn't set a minimum, but lenders do. Get in touch with NewDay USA to find out if you qualify.
Do disabled Veterans have to pay the VA funding fee?
No. Veterans receiving VA compensation for any service-connected disability are exempt from the funding fee on all VA loan types, including cash-out refinances. The same exemption applies to surviving spouses receiving DIC and qualifying Purple Heart recipients on active duty.
