VA Cash-Out Refinance in Florida and Colorado

A VA cash-out refinance allows eligible Veterans, service members, and surviving spouses in Florida and Colorado to convert home equity into cash. This loan replaces your current mortgage with a new one for a higher amount, and you receive the difference in cash at closing. Simply Approved Mortgages assists you in navigating this process.

what is a va cash-out refinance?

A cash-out refinance is a mortgage option guaranteed by the U.S. Department of Veterans Affairs (VA) that lets you take cash from your home's equity. It replaces your existing home loan, whether it's this type of loan or a conventional mortgage, with a new VA-backed loan. The VA partially guarantees the loan made by a private lender, which can offer favorable terms.

This type of refinance is distinct from an Interest Rate Reduction Refinance Loan (IRRRL), which is a streamline option for existing VA loan holders. A cash-out refinance typically involves a full underwriting process, including a new appraisal and a review of your income and credit. The cash you receive can be used for various purposes, such as home improvements, debt consolidation, or other significant expenses.

eligibility requirements

To qualify for a cash-out refinance, you must meet specific VA eligibility criteria and lender-specific requirements. First, you need a Certificate of Eligibility (COE) to confirm your VA home loan entitlement. This document verifies your service history meets the VA's requirements. Service requirements typically include periods of active service during wartime or peacetime, or six years in the National Guard or Selected Reserve. Surviving spouses may also be eligible under specific conditions.

The property must be your primary residence, meaning you intend to occupy the home as your main dwelling, generally within 60 days of closing. The VA does not set a minimum credit score for its loans, but private lenders, like those Simply Approved Mortgages works with, will have their own credit score requirements. Lenders will also evaluate your financial standing through a review of your debt-to-income ratio and a specific VA measure called residual income. Residual income is the amount of money you have left each month after paying major expenses and taxes, based on your family size and region.

the va funding fee

Most cash-out refinances include a one-time funding fee. This fee helps offset the cost to taxpayers and keeps the loan program running. It is typically a percentage of the loan amount and can be financed into the total loan. For a cash-out refinance, the funding fee is a flat 2.15% for your first use of entitlement and 3.30% for subsequent uses, regardless of the amount of equity you take out or your loan-to-value ratio. The funding fee can be paid at closing or financed into the loan. (Source: VA funding fee and closing costs.)

Certain Veterans are exempt from paying the funding fee. This includes Veterans receiving or entitled to VA compensation for a service-connected disability, those rated eligible from a pre-discharge exam or review, active-duty Purple Heart recipients, and qualifying surviving spouses. Your Certificate of Eligibility will indicate if you are exempt from this fee. If you believe you are exempt but the COE does not reflect it, you may need to provide additional documentation to the VA.

using home equity in florida

Florida's housing market has experienced notable shifts, and home equity has been a significant asset for many homeowners. Home prices can vary significantly over time in many markets, which has allowed many homeowners to build equity. This growth can mean substantial equity for homeowners. This equity can be accessed through a cash-out refinance to consolidate higher-interest debt, fund home renovations, or cover other needs.

For borrowers with full entitlement, VA loan limits do not apply. For those with reduced entitlement, the loan limits equal the FHFA conforming loan limits, such as $832,750 for a 1-unit property in most areas in 2026, and a high-cost ceiling of $1,249,125. In Alaska and Hawaii, for a 1-unit property, the limit for 2026 is $1,249,126. Even with robust equity, the decision to refinance should align with your financial goals. You can explore how a cash-out refinance might benefit you by using our VA cash-out refinance home equity calculator.

Florida property taxes can vary widely by county and municipality, often impacting monthly housing costs. Homestead exemptions can help reduce taxable value for primary residences. Homeowners insurance is also a critical consideration in Florida due to hurricane risks. When planning a cash-out refinance, ensure you factor in these ongoing obligations, as they are separate from your mortgage payment.

using home equity in colorado

Colorado's real estate market has also seen considerable appreciation in recent years. Historical house price indexes show that home prices can vary significantly over time in many markets. This trend has allowed many homeowners to build equity. A cash-out refinance can unlock this equity, providing financial flexibility for eligible Veterans and service members.

For veterans with full entitlement, VA loan limits do not apply. If you have reduced entitlement, limits apply and generally align with the FHFA conforming loan limits, such as $832,750 for a 1-unit property in most areas in 2026, with a higher ceiling in designated high-cost areas like Colorado, where it is $1,249,125. The equity accumulated from home value appreciation could be leveraged for various purposes. These might include paying for higher education, making energy-efficient upgrades to your home, or financing other major expenditures.

HOA fees are common in many planned communities and condominiums, especially in growing urban and suburban areas like those around Denver and Colorado Springs. These fees cover maintenance of common areas and amenities, and they become a part of your regular housing expenses. Before pursuing a cash-out refinance, it's wise to understand all ongoing costs associated with homeownership in your specific Colorado community.

va appraisal and property requirements

For a cash-out refinance, the VA requires an appraisal to determine the property's current market value and ensure it meets Minimum Property Requirements (MPRs). MPRs ensure the home is safe, structurally sound, and sanitary. This means the property must meet certain standards for habitability and condition. The VA appraisal is not a home inspection; it establishes a Notice of Value and checks Minimum Property Requirements (MPRs) for safety, soundness and sanitation.

If the appraisal identifies necessary repairs to meet MPRs, these will typically need to be completed before the loan can close. The cash-out amount you can receive is tied to the appraised value and your lender's maximum loan-to-value (LTV) limits. While some lenders in our network may cap cash-out refinances at 90% loan-to-value (LTV), including the financed funding fee, other investors offer high-LTV cash-out options up to 100% LTV if they follow VA Circular 26-19-05 without overlays, provided the home is not owned free and clear and your FICO score is at least 620, or 660 if the loan amount exceeds conforming limits. (Terms vary by lender, investor and file and are subject to change without notice; compiled from current VA program guides in our wholesale lender network, not a VA rule.) (Source: participating lender and investor program guidelines)

Note that Texas 50(a)(6) cash-out refinances are not allowed in the high-LTV program. (Terms vary by lender, investor and file and are subject to change without notice; compiled from current VA program guides in our wholesale lender network, not a VA rule.) A home owned free and clear is generally not eligible for that 90.01%–100% high-LTV tier. (Terms vary by lender, investor and file and are subject to change without notice; compiled from current VA program guides in our wholesale lender network, not a VA rule.) These terms are lender overlays and vary by investor and file. (Source: participating lender and investor program guidelines)

The information above on lender overlays is compiled from current VA program guides in our wholesale lender network and from VA Lenders Handbook M26-7, VA Circular 26-19-05 and 26-19-23, and 38 CFR 36.4300. These are lender overlays, not VA rules — the VA sets no minimum credit score and no maximum DTI. Terms vary by lender, investor and file and are subject to change without notice; not a quote, rate lock, offer, or commitment to lend. (Source: participating lender and investor program guidelines)

Terms vary by lender, investor and file and are subject to change without notice. Not a quote, rate lock, offer, or commitment to lend.

costs and fees

Like any mortgage, a cash-out refinance comes with closing costs and fees. These may include origination fees, appraisal fees, title insurance, and recording fees. Lender origination charges for these loans are capped at 1% of the loan amount. Additionally, the VA has a defined list of non-allowable fees that cannot be charged to the veteran. These costs can often be financed into the new loan or paid out of pocket. Seller concessions are allowed up to 4% of the reasonable value, on top of customary closing costs. Understanding all potential costs upfront is crucial. (Source: VA funding fee and closing costs.) (Source: VA funding fee and closing costs.)

For a detailed breakdown of what to expect, review our guide on cash-out refinance closing costs and fees. The VA funding fee is a one-time fee that applies to most loans and can be financed into the loan. Lender origination charges are capped at 1% of the loan amount, and a defined list of non-allowable fees cannot be charged to the veteran. Seller concessions are allowed up to 4% of the reasonable value, on top of customary closing costs. (Source: VA funding fee and closing costs.) (Source: VA funding fee and closing costs.)

when a cash-out refinance makes sense

A cash-out refinance can be a beneficial financial tool if you have substantial equity in your Florida or Colorado home and a clear plan for the funds. It may be a good option if you want to consolidate high-interest debts, finance a major home renovation, or cover other significant expenses at a potentially lower interest rate than personal loans or credit cards. The absence of monthly mortgage insurance with this type of loan can make it a more attractive option compared to conventional cash-out refinances, which often require it when less than 20% equity remains.

However, it's important to consider that you are replacing your current mortgage with a new one, which restarts the loan term and increases your overall interest paid over the life of the loan. While VA loans offer flexibility, including no prepayment penalties, you should carefully weigh the long-term implications. If your primary goal is simply to lower your interest rate without taking cash out, a IRRRL might be a more suitable option. You can learn more about these different options at VA Refinance Loan Options.

comparing with other options

When considering a VA cash-out refinance, it's helpful to compare it with other ways to access home equity. Options like a Home Equity Line of Credit (HELOC) or a home equity loan might offer different interest rates, repayment terms, and closing costs. A HELOC provides a revolving credit line, while a home equity loan offers a lump sum with a fixed repayment schedule.

Unlike these options, a VA cash-out refinance replaces your primary mortgage. This means your new loan will have all the benefits of this loan, such as the VA guarantee and no monthly mortgage insurance. Exploring these alternatives can help you decide which option best fits your financial situation. Our article Comparing VA Cash-Out Refinance With Other Equity Options. provides a more in-depth comparison.

how to get started

If you're an eligible Veteran, service member, or surviving spouse in Florida or Colorado and are considering a VA cash-out refinance, Simply Approved Mortgages can help. We work with various lenders to find a loan that meets your needs. We'll guide you through the process, from obtaining your Certificate of Eligibility to understanding the underwriting requirements and closing on your new loan.

To begin, you can start by checking your eligibility and exploring your options with our pre-qualification process. Visit our pre-qualify page to take the first step toward understanding your VA cash-out refinance potential.

What This Means for Your Estimate

A VA cash-out refinance estimate can help you plan your finances. Your actual loan details depend on factors such as home value, your entitlement, credit and income review, and full underwriting.

Eligibility Basics

For a VA-backed loan, eligibility is established with a Certificate of Eligibility based on service history, the property must meet VA Minimum Property Requirements, and the borrower generally must occupy the home as a primary residence. Simply Approved Mortgages is a brokerage, NMLS #2620881, and is not a lender, the VA, or a government agency.

Costs, Obligations, and Safeguards

Borrowers remain responsible for the monthly mortgage payment, property taxes, homeowners insurance, HOA dues when applicable, home maintenance, and occupancy requirements. Review any tax questions with a qualified tax professional.