How to Refinance a VA Home Loan
If you’re looking to improve your financial situation, it may be time to refinance your home. Whether you have a traditional mortgage or a VA home loan, refinancing can be beneficial. It can help to lower your interest rate and lets you tap into your equity without going through a reverse mortgage or second mortgage. Better yet, you can even refinance your home by transferring your conventional loan to a VA home loan. Here’s how to get started with the process.
Process for Refinancing Your VA Home Loan
There are two different ways that you can refinance your VA home loan. These include:
- Using a so-called Interest Rate Reduction Refinance Loan, also known as an IRRRL. This may also be referred to as VA Streamline Refinance.
- Choosing to go with the VA cash out refinance loan. This may be useful if you need to tap into your equity.
VA Interest Rate Reduction Refinance Loan (IRRRL)
The sole objective behind this program is to enable veterans to get into a lower interest rate situation. Otherwise, it is a rather low impact and no-frills option. However, there are a few different criteria you must meet first, including:
- You must already have a VA home loan.
- On the new loan, the rate must be lower unless you are moving out of an adjustable-rate situation (those could be tricky).
- It is not required for the home to be your primary residence.
- A prior occupancy is required.
- Certain VA lenders will, of course, have their own criteria for a minimum credit score, income level or even an appraisal. They may also want to sneak a peek into your payment history. Typically, they are only concerned with late payments in the past 12 months.
VA Cash-Out Refinance Loans
If you want to obtain access to some of your equity in your home, you may opt to go with a VA cash-out refinance loan. Simply refinance your current mortgage, even if it is not a VA loan, and get yourself a VA cash-out refinance loan. Here are the requirements:
- You must have at least the minimum required credit score or better and you must also have your home appraised.
- The home being refinanced must be your primary residence.
- You are allowed to finance up to 100% of the value appraised. The exact number will depend upon who your lender is and where you’re located. This also happens to be the only program that allows you to turn your conventional loan into a VA home loan
Additional Refinancing Requirements
For VA loans, there may be additional refinancing requirements. These depend upon your length of service, your credit score, your debt to income ratio at present, and other factors. There may also be requirements that come from the lender directly.
Evaluate Your Financing Options
At Mortgage Solutions Financial, we are experts in helping individuals refinance their home, and have extensive experience working with veterans and their families. Our team can help you evaluate your financing options and begin the process of refinancing. Contact us today to get more information.