The Department of Veterans Affairs provides benefits and programs to our country’s heroes in return for their dedication to keep our country safe.
Home loans, both purchase and refinance, are among those benefits that eligible Veterans enjoy up to this day. Mortgages under the VA are known to have better terms compared to other mortgages in the industry.
In terms of refinance loans, there are two known refinancing programs available: VA IRRRL and the VA Cash-out.
This time, let’s take a look back at what the VA’s cash-out refinance program has to offer.
Get to know the VA Cash-out Refinance
VA cash-out refinance is a program that allows borrowers to refinance their existing mortgage in order to score better loan terms.
Compared to VA IRRRL, this program enables the borrower to tap into the equity of their homes and pocket the difference after closing.
The borrower can use the money after refinancing for any purpose. The lump sum can be a perfect opportunity to pay off other debts or invest the money for it to grow elsewhere.
Other than that, this cash-out refinance program allows refinancing of up to 100% of the property’s value as long as there is an existing lien on the current mortgage.
Another thing that makes this program different from VA IRRRL is that this also enables eligible borrowers to refinance their existing non-VA loan.
In contrast, VA IRRRL only allows a VA to VA refinance. Meaning, existing non-VA mortgages will not qualify.
Determine if you’re eligible
Qualifications under this refinancing program are quite similar to other VA home purchase loan requirements.
Veterans and Servicemembers have to meet specific service requirements for them to be considered eligible.
Surviving spouses can also take advantage of this cash-out refinance program and other VA home loans as long as they meet the conditions set by the VA.
In order to know more about VA eligibility, complete information about their borrower requirements is found on their website.
You can also contact VA-approved lenders to check your eligibility. Other than that, they’re also willing to help you out in applying for one of their mortgage programs.
Learn about its application process
Before you jump into VA’s mortgage application process, you will need first to find a lender you can trust.
Next, you have to secure a Certificate of Eligibility (COE) as proof of that you qualify for any VA home loan benefits. Then you have to secure other documentation that will be needed during your application.
These may include W-2 forms, paycheck stubs, federal tax returns for the past 24 months, and other possible requirements that your lender may need.
Choose the right refinancing program for you
Before you start refinancing, you need to check if your current mortgage situation is worthy.
Keep in mind that refinancing is not for everyone. You can consult your lender and see if refinancing is your best bet.
Between the two refinancing programs under the VA, eligible Veterans and Servicemembers should determine which one would work for you.
Work on and weigh the pros and cons and settle for one refinancing program that fits your needs the most.Refinance your mortgage today.