6 ways to pull cash out of your home without refinancing

With current mortgage rates above 6%, many homeowners are reluctant to do a cash-out refinance. Although they want to tap their home equity, refinancing could cause them to lose their low mortgage interest rate.

Even if the current mortgage has a higher interest rate, cash-out refinancing often requires paying closing costs or could increase your mortgage payments. Homeowners who want access to their equity often wonder, “Can you pull equity out of your home without refinancing?”

Can you pull equity out of your home without refinancing?

While refinancing can be a good choice for some homeowners, it isn’t a good idea for everyone. Refinancing your mortgage restarts your loan term, and pulling out cash can increase your mortgage payments. Not to mention, if rates are high, you could significantly increase the interest you'll pay over the life of the loan.

Luckily, if you're looking to tap into your equity without resetting your mortgage terms, you have options.

How to get equity out of your home without refinancing

Here's how to pull equity out of your home without changing your mortgage terms or rate:

Home equity loan

A home equity loan is a fixed-rate loan, similar to a personal loan, that provides a lump sum of cash out from your real estate. If you need additional money, you need to apply for another loan. These loans are in second position to your primary mortgage, and your existing mortgage terms do not change.

• Loan amount: Between 80% and 85% of your equity
• Repayment term: 5 to 30 years
• Requirements: 15% to 20% equity, a 620 credit score or higher, a max DTI of 45%, and sufficient income

Home equity line of credit (HELOC)

A HELOC acts like a home equity loan, but it is a line of credit instead of a lump-sum distribution. You can withdraw and repay money throughout the draw period (typically 10 years). When the draw period ends, the remaining balance automatically converts to an amortizing loan.

• Loan amount: 80% to 85% of your equity
• Repayment term: 10 to 20 years
• Requirements: 15% to 20% equity, a credit score above 620, a DTI below 45%, and sufficient income

Home equity investment (HEI)

Home equity investments (HEIs) provide access to your home’s equity without requiring monthly payments or interest charges. Many homeowners can also qualify without income verification or with lower credit scores than a traditional mortgage. You’ll receive a lump sum of money in exchange for sharing your home’s equity and appreciation with the lender. You can repay at any time (max term of 30 years) or when you sell your home.

• Amount: $30,000 to $500,000
• Repayment term: 30 years; no monthly payments
• Requirements: Sufficient equity, a credit score of 500 or above, no income requirements

You can prequalify without impacting your credit.

Reverse mortgage

Reverse mortgages provide a lump sum, line of credit or a stream of payments to eligible seniors. These loans do not require monthly payments, but interest charges continue to accrue and can increase your loan balance. You’ll pay off the loan when the home is sold. In some cases, the balance becomes due if you move out of the home for an extended period of time. For example, if you move into a nursing home.

• Loan amount: Various based on the type of reverse mortgage; can generally access more the older you are
• Repayment term: Repaid when the borrower sells the home or passes away
• Requirements: aged 62 or older, own at least 50% equity, have sufficient income

Streamline refinance loan

A streamline refinance is an FHA mortgage program that allows homeowners with lower credit scores to refinance their homes with less paperwork. This program focuses on lowering mortgage payments for borrowers. While these loans are helpful to some borrowers, unfortunately, they are a poor choice if you're looking to pull cash out. The FHA limits cash out to just $500 with an FHA Streamline Refinance.

• Loan amount: Cannot exceed $500
• Repayment: Rolled into the new mortgage
• Requirements: An FHA-insured mortgage, current with mortgage payments for at least six months

How to get started pulling equity out of your home

Before you can do a cash-out refinance or use another option to pull money from your real estate, take three simple steps first.

• Check your home equity: Estimate your home’s current market value and subtract what you still owe on your mortgage.
• Explore your options: Compare home equity loans, HELOCs, cash-out refinancing, or home equity investments to see what fits your needs.
• Review your credit and finances: A better credit score and steady income can help you qualify for lower rates.
• Get quotes from lenders or providers: Shop around to compare interest rates, fees, and terms.
• Understand the costs: Factor in closing costs, possible appraisal fees, and how new payments could impact your monthly budget.
• Apply and prepare documents: Gather pay stubs, tax returns, mortgage statements, and proof of homeownership to streamline the process.

Frequently asked questions

Can you withdraw equity without refinancing?

You don’t always have to refinance your entire mortgage to tap into your home’s equity. Options like a home equity loan, home equity line of credit (HELOC), or a home equity investment let you access cash based on the equity you’ve built—without changing the terms of your primary mortgage.

Is it a good idea to take equity out of your house?

It can be, depending on why you’re borrowing and how comfortable you are with the added payments or risk. Many homeowners use equity to fund home improvements, pay off higher-interest debt, or cover big expenses. Just make sure you fully understand the costs, fees, and how it could affect your financial future before moving forward. Since you could lose your home if you default, be sure to have a repayment plan in place.

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Final thoughts

Getting a cash-out refi can be a good idea when current rates are lower than your existing mortgage. However, closing costs and an extended repayment period of a new mortgage may not be worth it for some homeowners. If you're wondering, "Can you pull equity out of your home without refinancing?" The answer is yes. There are multiple financing options homeowners can pursue that don't impact their current mortgage.