Can you refinance a VA loan?
VA loans make buying a home more affordable for veterans, active-duty military personnel, and surviving spouses. You can also refinance your home with a VA loan. Homeowners who qualify for refinancing can enjoy VA loan benefits like competitive interest rates and more generous credit terms.
Freedom Mortgage is the #1 VA lender1 in the United States. We are committed to helping veterans, military personnel, and surviving spouses refinance their homes. Talk to our experienced Loan Advisors about streamline refinancing today by calling 844-267-6544 or Get Started online.
1.Inside Mortgage Finance, January to September 2020
VA loan refinance options
Your refinancing options depend on the type of mortgage you have right now. If you bought your current home with a VA loan, you may qualify for an Interest Rate Reduction Refinance Loan (IRRRL). This type of refinancing may allow you to lower your interest rate with less paperwork and faster closing.
If you bought your home with a VA loan and want to get cash from your home equity, you may qualify for VA cash-out refinance. This lets you replace your existing VA loan with a new VA loan for a higher amount, and get the difference in cash at closing.
If you bought your current home with a mortgage other than a VA loan, you can also use a VA-backed cash-out loan to refinance your home. You’ll need to get a Certificate of Eligibility, provide income and financial documents, and have your home appraised with this option.
By refinancing, the total finance charges may be higher over the life of the loan. Here is a summary of your VA loan refinancing options:
|VA Cash Out Refinance||VA Streamline Refinance|
|Can get cash out||Yes||No|
|Can lower your interest rate||Yes||Yes|
|VA Funding Fee||2.3% to 3.6% 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|
Benefits of a VA home loan refinance
- Lower interest rates. VA refinance offers rates that are comparable to other traditional mortgage loan options.
- Lower funding fees. The funding fees for VA loans are often lower than the mortgage insurance costs you might have to pay for other types of mortgage loans.
- Higher loan-to-value ratios. In some cases, you may be able to refinance up to 100% of your home’s value with a VA loan.
- No pre-payment penalties. There are no penalties for paying off your VA loan early.
Current VA refinance rates
Refinance rates for VA loans can change daily. The rate you might get is affected by market conditions, your personal credit history and finances, and the kind of loan you want. The refinance rate you might get from Freedom Mortgage may be higher or lower than the rates you see on the websites of other lenders.
We are committed to offering competitive rates for VA refinances. Ask us the rate we can offer you on a streamline refinance by calling one of our VA loan specialists at 844-267-6544.
VA refinance guidelines
The guidelines vary depending on the kind of VA refinance you want and whether your current mortgage is a VA loan or a loan of a different type. Here are some key guidelines:
- Check your eligibility. If this is your first VA loan, check your eligibility. Veterans, active-duty military personnel, and some surviving spouses can all be eligible for a VA loan .
- Get a Certificate of Eligibility (COE). This is a document you will need for your first VA loan application. You may need it for later loan applications too.
- Make sure you’re current on payments. Lenders generally require you to be current on your mortgage payments before they will approve a refinance. They may also check for any recent late payments you’ve made.
- Meet the "seasoning" requirements. Lenders typically require you to hold your current mortgage for a minimum period of time before they will approve a refinance. This minimum period is sometimes called “seasoning” and can vary by loan type and lender. Freedom Mortgage follows the 6 months seasoning requirements set by the Department of Veterans Affairs.
- Refinance your primary home. You can only use a VA loan to refinance your primary home, which is the house where you live most of the time.
- Benefit from the refinance. The Department of Veterans Affairs requires a VA loan refinance to result in a real benefit to you. Lowering your interest rate or getting cash from your home equity can qualify. You can use our VA refinance calculator to estimate how much you might save from lowering your interest rate.
- Meet the lender’s standards. You will also need to meet the lender’s credit, income, and financial requirements to get your refinance application approved.
Why choose Freedom Mortgage for your VA refinance?
Freedom Mortgage is the #1 VA lender in the United States. We are committed to helping veterans, active duty military personnel, and surviving spouses who qualify enjoy the benefits of refinancing their homes with the VA home loan program.
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