Learn About the Refinance Options for a Veteran Home Loan

Veterans Affairs (VA) mortgages or Veteran Home Loans in Texas, Ohio, or in any other state of the US, have proven to be a boon for military veterans and servicemen looking to buy a home or refinance their existing mortgages. Low mortgage rates and stringent underwriting standards have resulted in an increasing demand for VA loans from refinancers. Refinancing with a VA home loan enables homeowners to refinance up to 100 percent of the home’s value, without having to pay for mortgage insurance. Let’s take a close look at what else is in store.

Low Interest Rate

Military homeowners who have an existing VA Home Loan can trim down their monthly payments or shorten their loan term through a streamline refinance program, better known as the Interest Rate Reduction Refinance Loan (IRRRL). This loan option is great for current VA loan holders who wish to realize significant savings; getting benefitted from lower interest rates.

One of the biggest merits of refinancing through the IRRRL is that it features little paperwork and often need little-to-no costs out of your pocket. Borrowers can easily roll closing costs into their total loan amount. A VA Loan also does not need a credit check or appraisal for refinances under IRRRL.

Refinancing your existing VA home loan through this program ensures borrowers to pay a lower funding fee that is typically 0.5 percent of the total loan amount. You can even add this to your loan balance. The IRRRL permits borrowers refinancing up to 100 percent of the home’s value.

Cash-Out Refinance

Cash-Out Refinance is an option for those with a current VA or conventional loan; looking to take benefit of their home’s equity to access cash for home improvements, pay off debt, emergencies, and other purposes. If you are a veteran with two mortgages and wish to refinance them into one loan, this refinancing option allows you to pay off first and second loans with a newly sanctioned loan. Maximum refinancers permit the homeowner to refinance up to 100 percent of the home’s value to pay off the old mortgages. Cash-Out Refinance is available to any qualified veteran homeowner, regardless of their availing an FHA, Conventional or USDA loan.

Remember

If you are a veteran and don’t have a VA home loan, you have the choice to refinance your conventional mortgage into a VA loan. If you apply to refinance a non-VA Loan into a VA loan program, the Department of Veterans Affairs considers it to be a cash-out refinance. The biggest advantage of this refinancing option is that it allows the homeowner to fully refinance the home’s value.

Conclusion

In most cases, refinancing a standard mortgage into a VA loan can indeed save you hundreds of dollars every month, allowing you to quickly recover the associated costs of refinancing. Besides, refinancing into a fixed rate loan from an adjustable-rate mortgage (ARM) gives you stability and surety concerning your monthly VA loan payments. If you wish to learn more, it is advisable to get in touch with a competent mortgage consultant.