Refinance California — Rate-and-Term and Cash-Out
California homeowners often hold large equity positions. The question is usually how to reach it without giving up the first mortgage you already have.
The Two Refinances
A rate-and-term refinance replaces your existing loan with a new one at a different rate or term. You are not taking cash out; the goal is a lower payment, a shorter payoff, or moving off an adjustable rate.
A cash-out refinance replaces your loan with a larger one and returns the difference to you. In California, where owners frequently hold several hundred thousand dollars of equity, cash-out is often used for renovation, consolidating higher-rate debt, or funding a second property purchase.
The California Equity Problem
Many California homeowners are sitting on two things at once: substantial equity, and a first mortgage at a rate they do not want to give up. A cash-out refinance resets the entire balance to today’s rate, which can be an expensive way to access equity if the existing rate is low.
That is why a HELOC or a standalone home equity loan is frequently the better instrument — it sits behind the first mortgage and leaves it untouched. Which of the three makes sense depends on how much you need, for how long, and what your current rate is. It is worth modeling rather than assuming.
Refinance Requirements
- Equity — cash-out generally requires keeping 20% equity, so up to 80% LTV
- Credit score — typically 620 or higher; cash-out often wants more
- Appraisal — usually required to establish current value
- Occupancy — primary, second home and investment property are all financeable at different terms
- Seasoning — some programs require you to have held the loan for a minimum period
- Streamline options — FHA and VA both offer reduced-documentation refinances for existing borrowers
Do Not Refinance a Low First Mortgage to Reach Equity
If you hold a first mortgage at a rate well below today’s, a cash-out refinance reprices your entire balance to get at a fraction of it. A second-position HELOC or home equity loan leaves the first mortgage alone. The comparison is arithmetic, not opinion — and it frequently favors the second lien.
California Refinance FAQ
How much equity do I need to refinance in California?
For a rate-and-term refinance, often as little as 5–20% depending on program. For cash-out, most conventional programs require you to retain 20% equity, capping you near 80% loan-to-value. VA cash-out can sometimes go higher.
Should I do a cash-out refinance or a HELOC?
It depends mainly on your current first mortgage rate. If it is low, a cash-out refinance reprices the whole balance to access part of it, which is often the more expensive route — a HELOC leaves the first mortgage intact. If your current rate is at or above market, cash-out may be simpler and cheaper.
Can I refinance a California investment property?
Yes. Investment property refinances are available, including DSCR refinances that qualify on the property’s rental income rather than your personal income. Expect lower maximum LTVs than on a primary residence.
Why do you not show refinance rates on this page?
Because a published rate would be wrong for most people reading it. Your refinance rate depends on credit, equity, occupancy, loan amount and county. We quote your actual scenario instead — send us your details and we will run it.
Should You Refinance?
Tell us your current rate, your balance and roughly what the property is worth, and we will tell you candidly whether refinancing helps you or not.
Mango Stock Mortgage | NMLS# 2815478 | Licensed by the California Department of Financial Protection and Innovation under the California Financing Law, License No. 60DBO-218256. Loans made or arranged pursuant to a California Finance Lenders Law license. We do not publish rates; all quotes are personalized. This is not a commitment to lend. All loans are subject to credit, underwriting, appraisal and program approval. Equal Housing Lender. See our Licensing & State Disclosures.
Related California Mortgage Resources
- California Mortgage — Statewide Home Loans
- HELOC California
- Conventional Loans California
- DSCR Loans California
- Get Pre-Approved in California
See what you qualify for
Tell us about the property and what you are trying to do. A licensed loan officer will come back to you within one business day with what is actually available — including when the answer is to wait.