When refinancing, did you know you can refinance any loan using your VA benefits? You can switch from a conventional to VA loan anytime, and from a VA loan to an FHA loan anytime (but why would you?). It doesn’t matter what type of loan you’re currently in—using your VA benefits is often the best route to take if you’re interested in buying your next home or refinancing your current loan.
Features of Refinancing Your VA Home Loan
When refinancing using your VA benefits, an appraisal or income documentation may not be required, and closing in less than 30 days is a possibility for most homeowners.
Some lenders have restrictions when it comes to utilizing your VA benefits for cash-out refinancing, but Homesite Mortgage allows 100% cash-out refinance VA home loans when using your VA benefits. Likewise, many lenders have restrictions regarding minimum credit scores when refinancing your VA home loan—but Homesite Mortgage will not only help borrowers improve their credit score, we also accept a minimum 580 credit score for VA loans. If you are receiving VA disability benefits, the funding fee is 100% waived, often resulting in very little to no closing costs. Learn more about the benefits of VA loans.
IRRRLs and Refinancing VA Home Loans
If you currently have a VA home loan, you can refinance into a new VA home loan through the IRRRL (Interest Rate Reduction Refinance Loan) program, also known as a VA streamline refinance program. With an IRRRL, typically no money out of pocket is required. Also with the VA IRRRL program, the new loan must be less than the current principal and interest payment of the loan being refinanced (there must be a tangible benefit, meaning you have to save money). The exception to this rule is if you are refinancing using the IRRRL program to get out of an ARM (adjustable-rate mortgage). Generally, no appraisal is required, but credit information and underwriting are needed. An IRRRL cannot be used to take cash out of your property to pay off debts, but it does allow you to receive a lower interest rate and quickly save money on your monthly mortgage payment. If you are not receiving VA-related disability benefits, the funding fee is reduced to only .5% of the loan amount, instead of the traditional 2.15% funding fee.
VA Benefits Available for Refinancing
Veterans are allowed to use their VA benefits at anytime—you can refinance your current loan, no matter the type—maximizing all the benefits the VA has to offer.
Refinancing into a VA loan has less restrictive qualification standards—credit scores as low as 580 are accepted by Homesite Mortgage, 100% cash-out refinancing is available at Homesite Mortgage, and shorter waiting periods can occur even when refinancing after a bankruptcy or foreclosure. Additionally, the VA has less restrictions regarding debt to income ratio requirements, which allows more borrowers to be approved sooner and for a higher loan amount than they would normally qualify for, regarding any other loan type.
Unlike conventional mortgages, which typically have higher interest rates for borrowers with lower credit scores, VA home loans will always offer the best rate, no matter your credit score.
Multiple VA Home Loans are Allowed
Many veterans are under the false assumption that they’re not allowed to have more than one VA home loan at a time—that is not the case. Under certain circumstances, you can have more than one VA home loan on multiple houses. Although some lenders have restrictions that don’t allow you to refinance your VA home loan on an investment property, Homesite Mortgage will allow an IRRRL to be used in order to lower your monthly mortgage payment.
Refinancing your VA home loan doesn’t have to be a mysterious or tedious process. Work with a lender who has full-knowledge of how to maximize your VA benefits and can walk you through refinancing your VA home loan every step of the way. Contact Homesite Mortgage to speak with a VA loan specialist who has personally used VA home loans and can guide your refinance with ease.