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Ready to Renovate? Consider Your VA Cash-Out Refinance Options

The VA Cash-Out Refinance is an excellent option for veterans who need some extra cash. The refinance, in effect, adjusts your interest rate and gives you the option of extracting money from your home's equity.

Here's how it works: Let's say you still owe $100,000 on a $200,000 mortgage, and you want a lower interest rate. You also want $25,000 cash for home repairs. You can refinance the mortgage for $125,000. (That's $100,000 for what you already owe and $25,000 for the repairs.) This money could be used towards anything your lender approves, but make sure you'll see returns on your investment. Remember, you'll get a better interest rate and extra cash, but your mortgage will be higher.

Home improvements are some of the best options for a cash-out refinance. These improvements can increase the value of your home while creating a more enjoyable living space. The best part: renovations can pay for themselves. Here are a few ways to spend your VA cash-out refinance that can pay dividends.


Kitchen and Bathroom

Kitchen and bathroom remodeling doesn't just impress your friends — the ROI can be huge as well. Depending on the improvements and your location, these renovations can yield more than 100 percent ROI. For homeowners looking to sell, recommends a traditional appeal: stone or natural wood floors, all-wood cabinets, commercial-look appliances and granite counter-tops. If you are planning on staying put, remodel to your liking!

Update the Utilities

Updating your home's electricity and plumbing can decrease your monthly utility bill and tremendously increase the value of your home. These simple and often inexpensive updates average 260 percent ROI.


A fresh coat of paint can be the simple touch-up your home needs. Dedicate a weekend towards painting the interior walls nice, neutral colors. Also consider a fresh coat of paint and primer for your outside walls. Painting is very cost effective and creates a pleasant living space.

Expand Your Home

Feeling a little cramped? It might be time to knock down a wall and spread out! Attic bedrooms, additional bathrooms, family rooms and playrooms typically produce a high ROI. Be wary of sunrooms and home offices, as they yield the smallest ROI (around 40 percent).

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Bump Up the Curb Appeal

Curb appeal is huge in the real estate industry, and there are tons of opportunities for improving your curb appeal. Consider installing outdoor lighting, starting a garden, adding outdoor art, upgrading your gutters or furnishing shutters. There are inexpensive DIY projects, such as DIY outdoor light fixtures, that can add personality to your home. Be creative and have fun with your outdoor renovations.

Add a Deck or Patio

Installing a deck or patio creates a place to enjoy the outdoors. You can add comfortable furniture, weatherproof the exterior or add a fireplace. Homeowners who added or improved a deck/patio saw a 78 percent ROI on average.

Replacement Siding

Vinyl siding has gained a reputation for being cheap (typically costing around $9,000 to install) and having a high ROI (around 83 percent). Fiber cement siding is another option that averages a higher cost (approximately $13,000) and an equally high ROI (around 87 percent).

Location, Location, Location

It's important when making home improvements to consider your neighborhood and region. You won't want to improve your home's value so greatly it's outside of the realty market in that area--your home will never sell. Also consider your region. An in-ground pool might be yield decent ROI in Florida, but Missouri might not be the best place for such an investment. By keeping your improvements pragmatic, you'll see extensive home value growth.

What would you do with the money from a VA cash-out refinance?

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