VA Refinance Options
Refinancing an existing home loan is common these days. Whether you need money to buy a new car, fund college tuition or consolidate debt, refinancing for cash can be extremely helpful and affordable. Alternatively, you may have an interest rate that is higher than the current market rate and want to take advantage of smaller payments. If you have a VA Loan, you have two great options when it comes to refinancing. The first is an Interest Rate Reduction Refinancing Loan (IRRRL) and the second is a Cash-out Loan.
The VA created the IRRRL to make refinancing easier and more affordable for veterans looking to take advantage of lowered interest rates. This loan is also called the VA Streamline Refinance loan due to the easy process of obtaining the loan. When you refinance with this plan, no additional paperwork is required on your part. This is because the VA already has all your information, including your credit score, income, appraisal, etc. The other benefit of an IRRRL is there are no out-of-pocket expenses.
If there are any additional closing costs, they can often be rolled into the new loan or paid for by the lender who can then charge you a higher interest rate. There are a few rules to keep in mind if you are interested in obtaining an IRRRL. The first is all the original borrowers will have to be the same on the new loan. If you are planning to drop your co-signer, you will need to resubmit all your financial documents again. Also, you will not be able to take out any cash with this loan. If you need money from your refinance, you will need to apply for a VA Cash-out Loan.
Sometimes you need cash, and you need cash now. If you find yourself in this situation, you can always refinance your current VA Loan for a cash-out loan. If your house is your primary residence, you will be able to refinance up to 90% of the appraisal value. The cash that is borrowed on your house can be used to pay off any outstanding liens against you directly, or you can use the cash for other purposes. What you do with the money is entirely up to you.
When you refinance your home you are not required to use the same lender from your first loan. Because you have many options, it’s a good idea to shop around a bit first before settling on lender to help you get the most out of your new loan.
How to Get Started Today
It’s never been easier to get started with a VA refinance. Simply fill out our secure 1-minute quote request form