Refinancing with a VA Loan
The Veteran’s Administration loans, or, VA loans, are a home-mortgage option available to veterans, current or former members of the national guard, an active reserve member, or a surviving spouse in the United States. Those who have a VA loan can also refinance with it. With a VA loan, you can do a standard VA cash-out refinance or a streamlined refinance.
Different Refinance Options
Standard Cash-Out Refinance
A VA cash-out refinance allows qualified veterans to either open a loan that is larger than their current loan or pay off a loan that is not currently a VA loan. Requirements for a VA cash-out refinance is similar to the VA</abbr? requirements when buying a home. An applicant must first meet the requirements of the VA home loan eligibility. This includes:
- Any veterans with an Honorable Discharge
- Any active duty service members
- Current reserve members of the National Guard
- Unmarried surviving spouses
- Any commissioned officers of the Public Health and National Oceanic and Atmospheric Administration
- Any veterans who have been discharged under conditions other than dishonorable
Some benefits of the VA cash-out refinance include financing up to 100% of the loan-to-value ratio, loans can be structured with no out-of-pocket costs, and low funding fees. Additionally, a VA cash-out refinance can pay off any type of home loan.
The VA streamline refinance, also called Interest Rate Reduction Refinancing Loan, or IRRRL, helps veterans lower their mortgage rates. It eliminates many things that may make refinancing difficult for other applicants. The VA streamline refinance is easier because of the following benefits:
- You do not need to provide paystubs or W2s
- You do not need to provide bank statements
- No home appraisal required
- Underwater home eligibility
- Lower funding fee than a VA purchase loan
- Little to no out-of-pocket expenses
You must have made one-time mortgage payments for the past year, with no payment more than thirty days late, to be eligible for the IRRRL. Additionally, your streamline refinance must improve the veteran’s situation, meaning that it must put the borrower in a better financial situation than they were in before.