In addition to saving money on the initial cost of buying a home, the VA Home Loan program also allows qualified homeowners the ability to get a lower rate and decrease current monthly mortgage payments. Military homeowners can also get cash back by refinancing with a VA home loan and use those funds to pay off debt, make home improvements or other expenses.
A Cash-Out refinance allows qualified veterans to refinance a conventional or VA loan into a lower rate, while extracting cash from your home equity. You have the ability to turn the equity you have in your home into cash.
One of the many benefits of VA loans is that qualified veterans that currently have a non-VA mortgage can refinance into a VA loan and still receive the benefits offered with this loan type with a VA Cash-Out refinance. The process of refinancing from a conventional loan to a VA loan is similar to purchasing a home with a VA loan.
You will go through the standard credit and underwriting process, including looking at credit scores, debt-to-income ratio, a home appraisal and income verification. However, this isn’t a second mortgage or a home equity loan. Your VA refinance will replace your existing mortgage. Whether you are refinancing from a conventional, FHA or USDA loan, the Cash-Out refinance option is available for qualified veterans.
With the VA Cash-Out, veterans can refinance up to 100% of their home’s appraisal value. This can vary depending on the lender, as some may only refinance up to 90%. First Meridian Mortgage is one of the few that allows 100% Cash-Out refinance.
As a veteran own business First Meridian Mortgage enjoys saving fellow veterans money. We are proud to offer the best refinance program called the Interest Rate Reduction Refinance Loan – (IRRRL).
The Interest Rate Reduction Refinance Loan is also referred to as a “Streamline” refinance. It is a good option for homeowners who currently have a VA loan and want to get a lower interest rate to save more money.
Refinancing with an IRRRL is simple and easy since you are simply refinancing from one VA loan product to another one. Some of the benefits of the IRRRL are:
The average veteran should refinance if you can save .25-.375% on your interest rate and if the credit received is enough to pay all the transactional closing cost and the VA funding fee. That way, your out-of-pocket expenses will be little to nothing. If you are going to keep the property longer, then paying a portion of the cost may make sense.
But more often than not, we recommend taking what you can get for free and if the market improves, refinance again.
If you’re interested in learning more about refinancing a VA loan in Maryland, Washington DC or Virginia, call First Meridian today at 703-799-5626to speak with a loan officer.