VA Refinance Loans
VA Refinance Loans are helpful when you find yourself in need of additional cash, perhaps to pay for home improvements or your child’s college tuition. Your home could be a source of equity from which you can borrow, if the terms and conditions are right. A VA Refinance Loan is a way to simultaneously take advantage of lower interest rates and get cash out of the existing equity in your home. The cash-out refinance money you take out can be used for any purpose such as debt reduction, paying for a wedding, or simply covering short-term cash needs. With interest rates at a historic low, now may be the time to think about refinancing your VA Home Loan. A cash-out refinance is available for a house that is used as your principal residence. A veteran-owner can refinance up to 90% of the appraised value (except in Texas) plus the funding fee and the cost of any energy efficient improvements up to $6,000, as long as the property can meet the designated loan to value ratio. With a cash-out refinance, there is no minimum amount of time that you must own your home, although your home must have sufficient equity to qualify for VA Refinancing. The cash-out refinance loan may be made to refinance the outstanding balance of an existing first mortgage, but can also include other debts, such as college tuition or home improvement funds. In fact, the refinance cash proceeds from the loan can be used for any purpose that is acceptable to the lender. Refinancing loans are subject to the same income and credit requirements as regular home loans. The VA cash-out refinance does require a home appraisal, unlike the VA streamline refinance. Once you get your appraisal back you can process the refinance for up to 90% of the accrued equity in your home. Don’t confuse this type of loan with a streamline refinance. While both are guaranteed by the government and come with reduced interest rates, there are also some important differences: the VA Cash Out Refinance includes a 3% funding fee (unless exempt), an appraisal is required, and finally, you must not have any reported late payments for the past 12 months.