What is the VA Cash-Out Refinance Program?
Veterans who would like to refinance their mortgages into a low rate while getting cash out of the equity in their homes may be eligible for the VA’s Cash-Out Refinance program. While the Department of Veterans Affairs doesn’t lend money directly to veterans, they do guaranty the loans, which allows mortgage brokers like us to assist veterans in obtaining a loan.
A VA Cash-Out Refinance Loan is different than a standard home equity loan, which is a second lien against your home. With a VA Cash-Out Loan, you’ll be replacing your existing mortgage with a new loan that allows immediate access to cash, using your home equity, with easy fixed-rate monthly payments.
If you’re considering a home equity line of credit, there are some good reasons to consider VA Cash-Out.
Why a VA Cash-Out Loan?
Are you interested in paying off credit card debt, going back to school or getting some cash for needed home improvements? A VA Cash-Out Refinance may be a great way to convert your home’s equity into cash. With home values increasing nationwide, it’s a great time to consider a VA Cash-Out Refinance.
Here are a few of the ways VA Cash-Out Loans help veterans include:
Paying off high-interest debt
Converting a non-VA loan to a better rate and term
Interest is tax deductible when compared to credit card debt*
Eliminating lingering tuition-related debt
*Consult your tax adviser for further information regarding the deductibility of interest and charges.
More Info the VA Cash-Out Refinance
Veterans who already have a VA loan will find the Cash-Out Refinancing process to be relatively similar. Similar to a VA purchase loan, you will have to go through standard credit and underwriting. 1818 Financial works with lenders that can offer the VA Cash Out Refinance program to veterans with credit scores as low as 600.
Unlike other loan programs that limit the amount you can borrow to 80% of your home’s value, the VA Cash-Out Refinance program enables eligible veterans to access 100% of their home’s value. That means that, if you bought a home for $200,000 and it’s now worth $250,000, you may be able to refinance up to $250,000.
A common misconception is that only veterans with current VA loans can get a VA Cash-Out Refinance. The reality is that even if you have a conventional, FHA or USDA loan, a VA Cash-Out Refinance may be an available option for you if you meet the requirements. Compared to many other kinds of mortgages, the VA Cash-Out Refinance is often more advantageous to veterans because it’s most often offered at a lower rate than a conventional mortgage.
Who is eligible for VA Cash-Out Refinancing?
If you were eligible for a VA Purchase Mortgage you probably meet the requirements for a VA Cash-Out Refinance Loan. The basic requirements for a VA Cash-Out Refinance include:
- Honorably discharged veterans, including veterans of the Reserve and National Guard
- Active duty service members
- Current Reserve and members of the National Guard (typically 6 years of service is required)
- Unmarried surviving spouses
- Commissioned officers of the Public Health and National Oceanic and Atmospheric Administration
- Any veterans that have not been dishonorably discharged
A Certificate of Eligibility (COE) is required from all VA borrowers, which 1818 Financial can assist you with. Occasionally, eligible veterans may need to provide a valid DD-214, which is your certificate of release or discharge from active duty, if the COE is not readily available through the VA’s portal.Questions? Contact Corey Leonard Today!