Refinancing VA Loans
Refinancing VA loans gives you some great benefits as a qualified veteran or service member. You may be able to decrease your monthly mortgage payments, get cash back on your home equity or lower your interest rate. Sometimes you may even get all three of these benefits in one loan!
As a military homeowner, you can use cash back on a VA refinance for a variety of needs ranging from paying off debts to making home improvements.
Do you want to lower your mortgage payments? Refinancing may help in a big way! You can get started by calling 800-720-0250 to talk with our VA experts.
Should you refinance using the VA program or with a conventional mortgage?
A VA Refinance is backed by the U.S. Department of Veteran Affairs and offered by VA authorized lenders like HomePromise. These kinds of loans are only available to qualifying veterans, active-duty service members, and surviving spouses.
Conventional loans are offered by lenders without government backing and are available to everyone who meets the lender’s requirements.
VA loans are often a better choice when you want to refinance your home because the VA loan program has no monthly mortgage insurance. Conventional mortgages often require monthly private mortgage insurance (PMI) if you have less than 20% equity in your home.
Monthly mortgage insurance can be expensive on a conventional mortgage if your credit score is below 700.
VA loans frequently have better terms and fees compared to conventional mortgages. This means as a veteran or service member you will get lower interest rates, lower home equity requirements, and lower credit score requirements and easier refinancing options compared to conventional loans.
If you are a service member who has earned a Purple Heart, a veteran with service-connected disabilities, or a surviving spouse, then you may be eligible to have your funding fee waived. This lowers the cost of your VA loan to the bare minimum compared to conventional loans that don’t have this option.
Your Certificate of Eligibility (COE) will show whether you can have the funding fee waived. HomePromise can get your COE from the US Department of Veterans Affairs for you – usually the same day you call us.
For both VA and conventional loans, your credit score matters. Most VA approved lenders look for at least a 640 minimum credit score. But HomePromise will make VA loans all the way down to a 580 credit score. Some conventional mortgage lenders require a 740 credit score to get their best terms.
A word of caution – VA loans are only for primary residences so you can’t buy an investment property that you will rent using the VA program. But, you can buy a duplex, triplex or fourplex if you intend to live in the home as your primary residence. You can rent out other units for income while you live in one of the units as you’re home..
For conventional mortgages, often you can only refinance 95 percent of your current home value. For example, if your new mortgage balance is going to be $300,000 then the appraisal must be at least $333,333 in order to qualify for a conventional mortgage. If the property value is closer to $300,000, then you can’t refinance your loan with a new conventional loan unless you bring the difference in a check to settlement. But, refinancing using the VA program may still be an option.
Get your questions answered now by calling 800-720-0250 to talk with our VA loan experts.
VA Loan Refinancing Rates
VA mortgages are typically cheaper and have lower interest rates than conventional loans, due to the government backing of VA loans. You can enjoy competitive rates usually lower than conventional loans based on your unique financial profile and situation.
If you need more help understanding VA refinance options or would like to find out your rate options, contact our VA specialists on 800-720-0250 and get your VA refinance now.
Can You Refinance a VA Loan?
You may be able to decrease your rate, tap into your home’s equity or even pay off a first and second mortgage with the HomePromise VA home loan program. Second mortgages are often adjustable rate mortgages with the risk that rates can rise leading to higher monthly payments. Payment an adjustable rate mortgage off with a new HomePromise fixed rate VA loan means your payments will be steady for the live of the loan.
As a veteran, you’ll need to meet eligibility requirements to qualify for a VA refinance, and at HomePromise, we promise that we’ll work hard to help you refinance even with a credit score of 580. Call our VA loan experts at 800-720-0250 to see if you qualify.
HomePromise offers two types of VA refinancing options including reducing the interest rate with a VA streamline refinance (VA IRRRL) and taking equity out of your home with a cash-out refinance
- VA Streamline Refinance: It is also known as Interest Rate Reduction Refinance Loan (IRRRL). With this, you refinance your loan with a lower interest rate without undergoing a full income and debt review. This saves you time and lowers your monthly payments.
- VA Cash-Out Refinance: This loan program allows you to refinance your existing VA, conventional, FHA, UDSA or privately financed loan with a new loan that lets you take out cash from your home’s equity. This may be used to cover emergency expenses, eliminate debts or make home improvements.
VA Loan Refinance With HomePromise
HomePromise offers veterans the options of VA Streamline IRRRL and VA Cash-Out refinance loans. The VA Streamline IRRRL option can be fast, and requires minimal paperwork to get through. The VA IRRRL has a low VA funding fee that’s only 0.5% of the loan amount. You can also usually roll the funding fee and the closing costs into the new loan.
To be eligible for a VA Streamline IRRRL mortgage, you must have a VA-backed mortgage already on your home. If your current mortgage is not a VA loan then you have to use the VA Cash Out program to refinance your current mortgage.
With the VA Cash Out refinance loan, you may be able to finance up to 100% of the appraised value of your home. Many lenders won’t let you finance up to 100% but instead force you to finance only 90%. HomePromise doesn’t make veterans stop at 90% but will allow all the way up to 100%.
You can refinance a non-VA loan with a new VA loan with the Cash Out refinance option.
The funding fee on an IRRRL is 0.5% of the loan amount while on a VA cash-out refinance, it’s 2.3% of the total loan unless it’s not your first VA loan in which case it would be 3.6%. Remember that you may qualify to waive the funding fee which will save you thousands of dollars in closing costs.
Refinancing VA Loans With HomePromise
Refinancing using the VA loan program requires a new loan application, a new title report, and some of paperwork. But, the benefits of using the VA refinance loan program are often worth the effort. If you’re ready to the process or have more question, call the HomePromise VA Loan experts at 800-720-0250.
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