VA Cash-out Option

VA Cash-Out Refinance

Even if you don’t have a VA mortgage right now, if you are a veteran, you can still refinance into a VA loan with a lower interest rate. Because of the mortgage refinance provisions of the Veterans’ Benefits Improvement Act of 2008, the VA can now help many more veterans who currently have conventional mortgages, adjustable rate mortgages or subprime loans.

Under the new law, veterans who wish to refinance their adjustable rate, subprime or conventional mortgage may now do so for up to 100 percent of the value of the property. These types of loans were previously limited to 90 percent of the value. Congress has also raised the VA’s maximum loan amount for these types of refinancing loans. Previously, these refinancing loans were capped at $144,000. With the new legislation, such loans may be made up to $729,750 depending on where the property is located. Increasing the loan-to-value ratio and raising the maximum loan amount will allow more qualified veterans to refinance through the VA, allowing for savings on interest costs or even potentially avoiding foreclosure.

Advantages of a VA Cash-Out Refinance

A VA cash-out loan allows you to use the equity you’ve accrued in your home to achieve your financial goals. If you have an adjustable rate mortgage, or are dealing with high-interest credit card bills, a VA cash-out refinance can give you financial peace of mind.

With a VA cash-out refinancing, you can use your equity to:

  • Consolidate credit card debt
  • Pay off a 2nd mortgage
  • Eliminate high interest loans
  • Combine debt into one low payment
  • Pay for home improvements
  • Invest
  • Pay for higher education

As with all VA mortgages, a cash-out loan must be used for a home you occupy. Unlike the Streamline program, there are appraisal and credit requirements that you must meet in order to qualify. Also, the VA  charges a 3% funding fee for the cash-out program. However, the fee can be rolled into the loan amount, and in some cases there are exemptions to the funding fee.

If you are a veteran and want to refinance into a lower interest rate, a VA cash-out refinance might be perfect for you. Please give us a call right away to discuss the VA refinancing options available to you.