VA Refinance
Whether you’re looking to lower your interest rate, reduce monthly payments, or tap into your home’s equity, VA refinancing offers flexible options tailored to veterans’ needs, helping you achieve your financial goals.
VA Loan Refinancing Options
VA Streamline (IRRRL) Refinance
The Interest Rate Reduction Refinance Loan (IRRRL), commonly known as the VA Streamline Refinance, is designed to help current VA loan holders reduce their interest rate and monthly payments with minimal hassle. This option is ideal if you want to lower your mortgage rate, switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or even shorten your loan term for faster payoff and long-term savings.
Key Features:
- No appraisal or income verification required in most cases.
- Lower closing costs, which can be rolled into the loan amount.
- No out-of-pocket costs: You can include all fees in your new loan.
- Reduced paperwork and quicker processing time compared to traditional refinancing.
VA Cash-Out Refinance
The VA Cash-Out Refinance allows eligible homeowners to access the equity they’ve built in their home by refinancing into a new loan with a higher balance. This option is perfect for those who want to use their home’s equity to pay off debt, make home improvements, or finance other major expenses. Unlike the IRRRL, you don’t need to have an existing VA loan to qualify; you can refinance from a conventional, FHA, or USDA loan into a VA loan
Key Features:
- Access up to 100% of your home’s value** in cash.
- Refinance non-VA loans into a VA loan to take advantage of better terms.
- May require a new appraisal and meeting credit/income requirements.
- VA funding fee may apply, which can be rolled into the loan amount.
| VA Streamline (IRRRL) Refinance | VA Cash-Out Refinance | |
|---|---|---|
| Purpose | Lower your interest rate and monthly payment. | Access cash from your home equity or refinance a non-VA loan into a VA loan. |
| Eligibility | Must currently have a VA loan. | Available for both VA and non-VA loan holders (e.g., conventional, FHA, USDA). |
| Credit Check | Credit check required. | Credit check required. |
| Income Verification | No income verification required in most cases. | Income verification required. |
| Appraisal Requirement | No appraisal required. | Appraisal required to determine home’s current value. |
| Occupancy Requirement | No current occupancy requirement, but must certify previous occupancy. | Must occupy the property as your primary residence. |
| Funding Fee | 0.5% of the loan amount, can be financed into the loan. | Based on down payment amount. No VA loans with no down payment*, 2.15% for first-time use, 3.3% for subsequent use, can be financed into the loan. Veterans with service-related disabilities may be exempt. |
| Closing Costs | Can be rolled into the loan amount. | Can be rolled into the loan amount, including funding fee. |
| Cash-Out Availability | Not available; used only to lower interest rate or change loan terms. | Available; can access up to 100% of home’s equity** as cash. |
| Time to Complete | Typically 30-45 days; quicker process due to reduced documentation. | Typically 30-45 days; may take longer if refinancing from a non-VA loan. |
| Loan Amount | Limited to the existing loan balance, plus allowable fees and closing costs. | Can exceed current loan balance to access home equity; up to 100% of home’s value**. |
| Best For | Veterans looking to reduce monthly payments or switch from an ARM to a fixed-rate loan. | Veterans seeking to consolidate debt, make home improvements, or refinance a non-VA loan into a VA loan. |
| VA Streamline (IRRRL) Refinance |
|---|
| Purpose Lower your interest rate and monthly payment. |
| Eligibility Must currently have a VA loan. |
| Credit Check Credit check required. |
| Income Verification No income verification required in most cases. |
| Appraisal Requirement No appraisal required. |
| Occupancy Requirement No current occupancy requirement, but must certify previous occupancy. |
| Funding Fee 0.5% of the loan amount, can be financed into the loan. |
| Closing Costs Can be rolled into the loan amount. |
| Cash-Out Availability Not available; used only to lower interest rate or change loan terms. |
| Time to Complete Typically 30-45 days; quicker process due to reduced documentation. |
| Loan Amount Limited to the existing loan balance, plus allowable fees and closing costs. |
| Best For Veterans looking to reduce monthly payments or switch from an ARM to a fixed-rate loan. |
| VA Cash-Out Refinance |
|---|
| Purpose Access cash from your home equity or refinance a non-VA loan into a VA loan. |
| Eligibility Available for both VA and non-VA loan holders (e.g., conventional, FHA, USDA). |
| Credit Check Credit check required. |
| Income Verification Income verification required. |
| Appraisal Requirement Appraisal required to determine home’s current value. |
| Occupancy Requirement Must occupy the property as your primary residence. |
| Funding Fee Based on down payment amount. No VA loans with no down payment, 2.15% for first-time use, 3.3% for subsequent use, can be financed into the loan. Veterans with service-related disabilities may be exempt. |
| Closing Costs Can be rolled into the loan amount, including funding fee. |
| Cash-Out Availability Available; can access up to 100% of home’s equity as cash. |
| Time to Complete Typically 30-45 days; may take longer if refinancing from a non-VA loan. |
| Loan Amount Can exceed current loan balance to access home equity; up to 100% of home’s value. |
| Best For Veterans seeking to consolidate debt, make home improvements, or refinance a non-VA loan into a VA loan. |
VA Refinance Eligibility
To qualify for a VA refinance, you must meet the following criteria:
Current VA Loan Holders
For the VA Streamline (IRRRL) refinance, you must currently have a VA loan and be seeking a lower interest rate or a different loan term.
No minimum credit score is required for the IRRRL, but your current loan must be current, with no more than one late payment in the last 12 months.
Property Occupancy
You must certify that you currently or previously occupied the home as your primary residence for the VA Cash-Out Refinance. The VA Streamline Refinance does not require current occupancy.
Other Homeowners
For the VA Cash-Out Refinance, you must meet VA eligibility requirements, including having a valid Certificate of Eligibility (COE).
You can refinance from a conventional, FHA, or USDA loan into a VA loan, as long as you meet the VA’s service and property requirements.
Seasoning Requirements
Typically, you must wait at least 210 days from the first mortgage payment due date and have made at least six consecutive on-time payments before refinancing.
Find Out If You Qualify for VA Refinancing
Ready to lower your payments or access your home’s equity? Our loan officers are here to help determine your eligibility and guide you through the VA refinance process from start to finish.
Apply NowUnique Benefits of Using a VA Loan for Home Purchase
Lower Interest Rates
Refinancing with a VA loan can help you secure a lower interest rate compared to conventional loans. This can result in significant savings over the life of your loan and lower your monthly payments.
Access to Home Equity
With a VA Cash-Out Refinance, you can access up to 100% of your home’s value**, providing you with cash for debt consolidation, home improvements, or other financial needs.
No Private Mortgage Insurance (PMI)
VA loans do not require PMI, even if you refinance more than 80% of your home’s value. This can save you hundreds of dollars each month compared to conventional refinancing options that require PMI for high loan-to-value ratios.
Flexible Credit Requirements
VA refinancing typically has more lenient credit requirements compared to conventional loans, making it accessible to veterans with less-than-perfect credit.
No Prepayment Penalty
VA loans do not have prepayment penalties, allowing you to pay off your mortgage early without any extra fees. This flexibility can help you save on interest and pay down your loan faster.
Streamlined Process
The VA Streamline Refinance option offers a simplified process with reduced documentation and quicker processing times, making it easier to take advantage of lower rates without the usual refinancing hassles.
Steps for a VA Refinancing
Determine Your Refinancing Goals
Decide whether you want to lower your interest rate, shorten your loan term, or access cash from your home’s equity.
Check Your Eligibility and Obtain Your COE
Ensure you meet the eligibility requirements for a VA refinance. Obtain your Certificate of Eligibility (COE) if needed, especially for a VA Cash-Out Refinance.
Choose Your Refinancing Option
Decide between the VA Streamline (IRRRL) Refinance and the VA Cash-Out Refinance based on your financial needs and goals.
Get Pre-Approved and Compare Lenders
Get pre-approved to understand your loan options and compare terms from different lenders. Consider factors such as interest rates, fees, and closing costs.
Gather Necessary Documentation
Prepare the required documents, such as proof of income, W-2s, and tax returns for the past two years. You may also need a recent appraisal for a VA Cash-Out Refinance.
Submit Your Application
Complete your loan application and submit the necessary documents to your chosen lender. Your lender will review your application and determine your eligibility.
VA Appraisal and Underwriting
If required, your lender will order a VA appraisal to determine your home’s current value. The loan will then go through the underwriting process, where your financial information is verified.
Close on Your New Loan
Review and sign the final documents. Pay any closing costs, which can often be rolled into the loan amount. Once the loan is closed, you’ll receive any cash-out funds and begin making payments on your new loan terms.
Enjoy the Benefits of Your VA Refinance
With your new loan in place, enjoy the financial benefits of lower payments, improved loan terms, or extra cash from your home’s equity.
VA Refinance FAQs
The VA Streamline Refinance, also known as the Interest Rate Reduction Refinance Loan (IRRRL), allows current VA loan holders to refinance to a lower interest rate with minimal documentation and no appraisal in most cases. It’s designed to simplify the refinancing process and reduce monthly payments.
The VA Cash-Out Refinance enables you to take out a new loan for a higher amount than your current mortgage, allowing you to access the equity in your home as cash. This option is available to veterans and service members who want to refinance any type of existing mortgage into a VA loan, whether it’s conventional, FHA, or USDA.
Yes, the VA Cash-Out Refinance allows you to refinance from a conventional, FHA, or USDA loan into a VA loan. This can be beneficial if you want to take advantage of the VA loan benefits, such as no PMI and favorable interest rates.
Yes, VA refinancing typically involves closing costs and a VA funding fee. The funding fee helps cover the cost of the VA loan program and can be rolled into the loan amount. Veterans with service-related disabilities may be exempt from the funding fee.
Typically, you need to wait at least 210 days from the date of your first mortgage payment and have made at least six consecutive on-time payments before you can refinance. Lender-specific guidelines may also apply, so it’s best to consult with your loan officer.
For the VA Streamline Refinance (IRRRL), you do not need to currently occupy the property. However, you must certify that you previously occupied it as your primary residence. For the VA Cash-Out Refinance, you must currently occupy the property as your primary residence.
The VA Streamline Refinance offers several benefits, including no appraisal requirement in most cases, lower closing costs, reduced interest rates, and a simplified application process. It’s ideal for those looking to reduce their monthly payments quickly and easily.
Additional Resources
Buyer’s Market or Seller’s Market? 10 Key Indicators Every Agent Should Track
Beyond the List Price: Understanding the True Cost of Homeownership
How to Help Clients Understand & Adapt to Market Shifts
Ready to Refinance with Your VA Loan?
Lower your payments, reduce your interest rate, or access your home’s equity. Our expert loan officers are here to help you explore your VA refinance options.
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