VA Loan Refinance Options

Learn the Basics of VA Loan Refinancing

PLEASE NOTE that the following information is strictly educational. VA Mortgage Center does not offer VA Refinancing options. To use your VA Loan benefits for VA Refinancing, please use Veterans United Home Loans for your VA Loan refinancing needs.

VA IRRRL Refinance

The VA Interest Rate Reduction Refinance Loan (IRRRL), also known as the VA Streamline Refinance, is one of the best options for existing VA loan holders who want to take advantage of lower interest rates or refinance into a fixed-rate mortgage.

Refinancing to a lower interest rate can save borrowers thousands of dollars over the life of their loan. Key aspects of the VA Streamline refinance include:

  • Closing costs and fees can be rolled into the new loan
  • There is no need to request another Certificate of Eligibility (COE)
  • In some cases, there is no appraisal or minimum credit score required
  • Streamline refinance can often be completed quickly with little paperwork
  • Borrowers need only show prior occupancy of the property being refinanced

VA IRRRL Refinance Requirements

The IRRRL refinance option is fairly quick and uncomplicated, but it does come with a few requirements and guidelines.

Borrowers who choose this refinance type are not allowed to extract cash from their equity, and they can only refinance a property on which they have already used their VA loan eligibility. For a full list of eligibility requirements, check the Department of Veterans Affairs website.

It is important to note that even though the VA does not require appraisals or credit underwriting, VA lenders can and often do have their in-house requirements for VA Streamline Refinance loans.

VA Cash-Out Refinance

The VA Cash-Out Refinance is best suited for qualified homeowners who want to take cash out of their home’s equity to pay for bills, make home repairs, cover emergency expenses, etc. It also allows qualified borrowers without a VA loan to refinance into the program.

When a borrower takes advantage of their Cash-Out Refinance option, they are getting a new mortgage at a value higher than what they owe, and taking the difference in cash.

The main features of the VA Cash-Out refinance include:

  • Borrowers are allowed to use their Cash-Out refinance option, regardless of loan type. This means FHA, conventional and USDA loans can all be refinanced using this option.
  • Qualified borrowers can, in some cases, refinance up to 100 percent of their home’s value.
  • Veterans with conventional loans can refinance into a VA loan.
  • Cash-Out Refinance loans follow the standard VA loan credit and underwriting process.

It can be easy to confuse a Cash-Out Refinance with a home equity loan, but they have several key differences. A home equity loan is a second loan alongside an existing mortgage. A Cash-Out Refinance loan replaces your current home loan.

VA Cash-Out Requirements

If a borrower has already been through the VA purchase process, they will find the process for a VA Cash-Out refinance is very similar. Some of the requirements include:

  • Borrowers need to meet a lender’s credit score requirement and have an appraisal on the property
  • You have to currently occupy the property you’re refinancing
  • Borrowers may be able to refinance up to 100 percent of the home’s value

Any veteran considering a refinance or home equity loan should be sure to shop around, compare options and keep an eye on rates to determine which option would be best for them. It may also be a good idea to speak with a trusted VA lender to find out more information about all refinancing options available.

VAMortgageCenter is a VA Approved Lender. Not affiliated, endorsed or sponsored by a government agency. Mortgage Research Center – NMLS #1907

To learn more about your VA Loan benefits, visit our Frequently Asked Questions page.

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