If you’re a veteran or active military you’re surely aware of the benefits you’ve earned because of your service. If you’re also a homeowner, there are VA home loan benefits that get you some of the best refinancing deals you’ll find.
Why refinance with a VA home loan?
To start, you can get a lower interest rate, which almost always means lower monthly payments. Maybe you want a shorter term to pay off your mortgage sooner, which will also save you thousands in interest over the life of the loan. Many people switch from their adjustable-rate mortgage (ARM) to a stable fixed-rate loan. No matter what you want to accomplish, you can use your VA benefits to refinance your home, even if you don’t currently have a VA loan.
The VA won’t actually do your refinancing or give you the loan. You choose a private lender and then the VA will guarantee a portion of the loan for them in event you have trouble with payments or are at risk of default. This guarantee includes additional benefits for you including easier income and credit qualification, little or no closing costs and no early payoff penalty. Plus, if you don’t currently have a VA loan, and you’re paying for FHA or private mortgage insurance, VA refinancing lets you eliminate that cost entirely for even more monthly savings.
A popular VA refinancing option is cash-out refinancing. Not only can it get you a better mortgage with a lower interest rate, it gives you a way to take care of any personal or financial needs you might have. It lets you turn part of your existing equity into cash to use however you like.
- Pay down or eliminate high-interest credit cards
- Pay off auto loans or other debt
- Remodel or make home repairs
- Take care of health related expenses
- Pay for college
If you already have an existing VA home loan, you can use the VA Interest Rate Reduction Refinance Loan (IRRRL) to lower your rate, and lower your monthly payments. You can’t get cash-out with this option, but if you have an ARM loan, you can switch to a fixed-rate loan that promises your rate won’t go up. Other IRRRL advantages include:
- No appraisal or credit underwriting is required
- No income and/or asset verification is needed
- There will be no out-of-pocket expenses
- A certificate of eligibility (COE) isn’t required
All of your VA home loan benefits are also timeless. They never expire. If you refinance in the future, or when you’re ready to buy your next home, you’ll always be able to take advantage of the VA home lone benefits you’ve earned.
A PrimeLending Home Loan Expert will be happy to help you learn more or answer any questions you have.
From the PrimeLending blog, by Mandy Jordan