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Benefits of VA cash out refinances

  • Closing costs & funding fee can be rolled into loan

  • Ability to finance up to 100% of your home's value

  • Lower rate or better terms

  • Can pay off high-interest debt

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What do you want to do?

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What is a VA cash out refinance and how does it work?

Put your home’s equity to work for you with a VA cash out refinance. If you want to lower your rate, but also get cash to pay bills, consolidate high-interest credit card debt, improve your budget or make home improvements then you may want to opt for a VA cash out refinance.

How does a VA cash out refinance work? This type of refinance is different from a VA Streamline Refinance (IRRRL) as it allows you to tap into the equity in your home to access cash to pay off debt, make home improvements or fund a high-cost expense such as a car or college. Qualified homeowners can refinance up to 100% of their home’s value for mortgage debt. VA homeowners can also refinance a lower percentage and use the cash to cover debt payments and other needs.

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What are the benefits of a VA cash out refinance?

A VA cash out refinance gives you the flexibility to use your home's equity to pay off high-interest debt and expenses. The proceeds from a VA cash out refinance can also be used to pay down credit card balances, medical expenses and student loan debt as well as to pay for college, make emergency home repairs or renovations and improvements. There are also no restrictions in how you use the money you take out. In addition, since you are also refinancing your VA loan, you may even be able to reduce your interest rate and adjust your loan term as well.

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VA cash out refinance vs. VA Streamline Refinance

The VA cash out refinance process differs slightly from a VA Streamline Refinance (IRRRL). With a VA Streamline Refinance, there is less paperwork needed and it’s a shorter process. For a VA cash out refinance, the borrower needs to verify income as well as get a home appraisal to determine how much their home is worth. Here are some more differences between the two VA refinance options.

 
  VA Cash Out Refinance VA Streamline Refinance
Can get cash out Yes No
Can lower your interest rate Yes Yes
VA Funding Fee 2.15-3.3% of loan amount 0.50% of loan amount
Who can apply? Can be used even if you don’t have a VA loan Need to have a VA loan
Owner occupied? Yes No

 

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VA Cash Out Eligibility

To be eligible for a VA cash out refinance, you must either have an existing VA loan or have a conventional loan you want to refinance and sufficient equity in your home. The VA cash out refinance is the only loan that allows you to refinance up to 100% of the value of your home. If you do not currently have a VA loan, you must meet at least one of the following criteria to be eligible:

  • 90

    consecutive days of
    service during war time

    or
  • 181

    consecutive days of
    service during peacetime

    or
  • 06

    years of service in the
    Reserves or National Guard

    or
  • Un-remarried surviving
    spouse of a veteran

 

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The Cash Out Refinance Process

This VA Cash Out Refinance process differs slightly from a VA streamline refinance (IRRRL) as the borrower needs to verify income as well as get a home appraisal to determine how much their home is worth. Here are the steps to take to help you through the cash out refinance to put your home equity to work for you.

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Freedom Mortgage Sales Operations

Message from Freedom Mortgage Team

Shamika B.

Freedom Mortgage Sales Operations

What makes Freedom Mortgage special for Veterans is that they hold one of the most important core values that I served under and still live under, integrity. It means a lot to work for Freedom and to help other Veterans who have fought for freedom. It's a form of giving back for me.

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