The VA Home Loan program provides qualified homeowners with a simple way to take advantage of lower rates and decrease their monthly mortgage payment. Beyond that, military homeowners can get cash back on a VA refinance and use the proceeds for a variety of needs, from paying off debt or making home improvements and much more. The current economic climate makes now a great time or many military homeowners to take advantage of the numerous benefits found in a VA refinance.
Two main programs help VA borrowers refinance to a lower rate -- the VA Streamline Refinance, also known as the Interest Rate Reduction Refinance Loan (IRRRL), and the VA Cash-Out Refinance.
|VA Streamline (IRRRL) Refinance||Cash-Out Refinance|
Often called a "Streamline" refinance, the Interest Rate Reduction Refinance Loan (IRRRL) option is great for existing VA Loan holders who are looking to realize significant savings and take advantage of lower interest rates.
A "cash-out" refinance is an option for those with a VA or conventional loan looking to take advantage of their home's equity to access cash for home improvements, emergencies, pay off debt, or any other purpose.
A Streamline Refinance allows veterans who currently have a VA Loan to refinance into a lower interest rate, reducing monthly mortgage costs. Streamline refinance loans feature little paperwork and often require little-to-no costs out of pocket. Borrowers can roll closing costs into their overall loan amount. Some homeowners can also secure a Streamline refinance without an appraisal.
The other popular option, known as the Cash-Out Refinance, allows borrowers to tap into their home's equity and use it as cash. This type of refinance is available to any qualified veteran homeowner, regardless of whether they have a FHA, USDA or conventional loan.
The current economic climate makes now a great time for many military homeowners to take advantage of the numerous benefits found in a VA refinance.
Eligibility for a VA Refinance is similar to that of a home purchase VA Loan.
Typically, you can qualify if you served on active duty for more than 90 consecutive days during wartime or more than 181 days of service during peacetime.
For National Guard members and Reservists, the veteran must have served at least six years.
Some surviving spouses of veterans who died while in service or from a service-connected disability may also be eligible.
It is important to note that in order to receive a VA Streamline refinance, you must hold an existing VA Loan.
Once approved for a VA Loan, your journey does not stop there. Learn more about helpful tips and contract guidelines in our next section.