Refinancing with a VA Loan
Qualified borrowers can also take advantage of lower interest rates and decrease their monthly mortgage payment by refinancing with a VA loan. The VA Streamline Refinance, or the Interest Rate Reduction Refinance Loan (IRRRL), and the VA Cash-Out refinance are two programs available for homeowners to refinance to a lower rate.
In most cases an appraisal is not needed
No new Certificate of Eligibility is required
No requirements for out-of-pocket costs
Streamline (IRRRL) Refinancing
If you already have a VA loan and would like to refinance for a lower monthly mortgage rate, the streamline refinance may be the best option. With this type of refinance there is no required appraisal, little to no out-of-pocket costs that can be rolled into the closing costs of the loan, and no Certificate of Eligibility since homeowners are refinancing from one VA loan product to another. Choosing the IRRRL product inhibits a borrower from receiving any cash back at close and you must be current on your mortgage with no more than one 30-day late payment within the past year.
Qualified veterans have the option to turn the equity in your home into cash with a VA Cash-Out refinance. Not to be confused with a home equity loan, the VA Cash-Out refinance will replace your existing mortgage at a lower interest rate while extracting cash. Program aspects include:
If you are refinancing from a conventional or other mortgage program to a VA cash-out refinance you are not required to take any cash out.
This type of refinance does follow the standard VA loan underwriting and credit process
Closing costs and funding fees can be rolled into the loan amount
You must certify the property being refinanced will be occupied