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 vary by credit flexibility, LTV allowances, rate competitiveness, and customer experience. This guide breaks down what to look for, who consistently earns strong marks, 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 as cash at closing. It's one of the most Veteran-friendly financial tools in housing because it works with any existing loan type from VA, FHA, to 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. There's no restriction on how you use the money.
A few things make this product 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: While most conventional and FHA cash-out loans cap at 80–85% of the home's appraised value, VA program guidelines allow up to 100% LTV, although many lenders apply overlays and cap at 90–95% in practice.
- Competitive rates: VA loan rates have historically run below conventional mortgage rates for comparable borrowers.
It's worth understanding that 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:
Rate competitiveness: VA loans generally carry lower rates than conventional mortgages, but there's still meaningful variation between lenders. Rates in early 2026 for 30-year VA loans have ranged in the mid-to-upper 5% range, according to Zillow data cited by Yahoo Finance. Comparing at least three to five lenders before locking is worth the effort.
LTV flexibility: VA program rules allow 100% LTV, but individual lenders often cap at 90–95%. For Veterans needing to access more equity, this can make a real difference.
Credit score minimums: The VA itself doesn't set a minimum credit score for cash-out refinances, but lenders do. Many require at least a 620 FICO score for cash-out refinances specifically.
Customer experience and transparency: Processing times, loan officer responsiveness, and clear disclosure of all costs are all part of the equation.
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. For qualified borrowers who meet specific criteria, NewDay USA also offers financing up to 100% LTV, a threshold many competing lenders cap at 90-95%.
NewDay USA's concentration 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
Pennymac is one of the nation's largest retail VA lenders by volume. It lends in all 50 states and offers a "close on time guarantee", which means that if the loan doesn't close on schedule, borrowers receive a lender credit. Pennymac also frequently services the loans it originates.
PenFed Credit Union
Pentagon Federal Credit Union (PenFed) offers both VA cash-out refinancing and a no-closing-cost option on VA IRRRL (streamline) refinances.
Rocket Mortgage
Rocket Mortgage is among the lenders frequently listed in VA refinance comparisons. It offers a digital-driven process, accepts credit scores as low as 580 for VA loans, and provides multiple loan term options. Veterans who prefer to handle their refinance primarily online may find it a workable fit.
Carrington Mortgage Services
Carrington is one of the more accessible options for Veterans who want to tap home equity and might not qualify with lenders that hold stricter score overlays.
The VA Funding Fee: What Veterans Need to Know
The VA funding fee is a one-time 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, according to VA.gov.
This fee can be rolled into the loan rather than paid upfront, which many Veterans choose to do. Rolling it in keeps out-of-pocket costs low at closing but does increase 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, as well as for surviving spouses receiving Dependency and Indemnity Compensation (DIC) and 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 meaningful 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, not just the equity access.
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
- Whether the funding fee exemption process is handled proactively
- 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 (usually capping at 90–95%) 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.
