Getting a cash out refinance mortgage means that you are taking equity out of your home other than the amount needed to cover all the closing costs. Normally, up to one percent of the loan amount is allowed for closing costs without being considered a cash out refinance.

Why would it make any difference if you refinance your mortgage with cash out? The answer is that certain lenders have specific restrictions about receiving cash out within a designated time frame. Some lenders will add a premium to the interest rate, or the maximum loan to value may be reduced.

Mortgage lenders often have a seasoning requirement, which can limit the cash out based on how long it has been since equity has been taken out of your home. The typical seasoning requirement for a cash out refinance can be 6 months to 1 year, but some refinance mortgages do not require any seasoning. Usually, this guideline applies if your mortgage will be over 75% loan to value.   

The cash out seasoning guideline is not limited only to a previous mortgage refinance. If you have taken out a home equity loan, second mortgage, or an equity line of credit, within the last 6 months to a year before refinancing, your new mortgage can also be considered a cash out refinance.