You can get cash out through a first mortgage, a second mortgage or a home equity line of credit (heloc). Some lenders will require that you stay within certain loan to value (ltv guidelines) for cash out. Conforming limits are 90% LTV and FHA cash out is limited to 85% LTV. Many subprime lenders will go to 100% cash out with good credit.

Whenever you take a decent amount of cash out from your home, your LTV (loan to value ratio) will probaby exceed 80%. To avoid paying mortgage insurance on these loans, many borrowers split the amount borrowed into two loans, a first and a second. Typically, the first mortgage has a LTV of 80%, but there are loan programs where having the first mortgage at 70% LTV offers more favorable terms to the borrower. The lower the LTV ratio, the less risk the lender will have in offering you a loan.

FHA update on October 31, 2005 allowing for a cashout refinance to go as high as 95% LTV. Previously the guidelines only allowed for a maximum of 85% LTV. These changes will allow many borrowers to take advantage of the equity in there homes and still obtain low rate financing.

Taking cash out on a home refinance is one of the many factors a lender takes into account when evaluating the risk of the loan.

In certain situations, taking cash out may cause the lender to perceive the loan to be of higher risk. This could result in a slightly higher interest rate or additional restrictions on qualifying for the loan.

Some non-conforming lenders will allow cash-out up to 125% of the value of your home.

If you're looking to take out unlimited cash out when refinancing consider a rate and term refinance of your first mortgage and a home equity loan second mortgage option. Taking cash out proceeds from your second mortgage allows you to get a better rate on your first mortgage.