Interest rates for VA refinancing are low and many homeowners are finding extra money in their pockets when they refinance their home with a lower interest rate. Like most aspects of the VA loan program, VA refinancing comes with several advantages.
Advantages of VA Streamline Refinance
A VA loan refinance (or also called IRR Refinance, VA to VA refinance or VA Streamline Refinance) can allow you to refinance your VA loan at a lower interest rate. With VA refinancing, you often get to skip the hassles built into other loan programs and enjoy a simplified process. With VA refinancing…
- You don’t need an appraisal.*
- You don’t have to provide any income or employment verification.*
- You don’t have to show your certificate of eligibility.
- You don’t have to prove future occupancy – just that you’ve previously occupied the property for the past two years.
- You could reduce the term of your VA loan from 30 to 15 years through an IRR refinance.
- Options for reduced (or zero) out-of-pocket costs for closing costs such as lender-paid closing costs (in exchange for a higher interest rate) or closing costs rolled into the home loan.
- You have cash-out options when you refinance your loan.
*(Please not that some mortgage companies may require appraisals, employment verification and income statements. In order to qualify, you must have made up-to-date payments for the last 12 months.)
Cash-Out/Debt Consolidation Options for VA Refinancing
If you have several areas of debt such as car loans, student loans and credit cards, VA refinancing your home can consolidate your debt into your mortgage payment. With lower mortgage rates, this can save borrowers money, or at least allow them to pay off debt sooner. Those doing VA refinancing may also apply for a cash-out loan and take out extra funds to pay for home repairs, educational costs and more with the home’s equity.
When does VA Refinancing Not Make Sense?
The only time when your VA refinancing may NOT save you money is if you’re transitioning from an VA ARM to a VA fixed-rate. In most other cases, this is a great program that rewards veterans through home loan incentives. If you’re considering VA refinancing, request to know all of the closing costs and fees at the start so you can work with your mortgage consultant and determine if VA refinancing is right for you.