VA Home Refinance Options

VA or veteran loans are available to people who are serving in the military and armed services or have done so in the past. People employed in the public health service may also be eligible.

VA home loans are becoming very popular these days and it is not surprising to see why. With a VA loan there is no requirement for a down payment and the borrowing expenses in relation to closing out costs and lenders fees are lower compared to private commercial lenders.

Another key benefit with a VA mortgage is there is no need for mortgage insurance because it is the Federal Government who guarantee the loan.

Pros:

No down payment required
Lower interest rates
No PMI
No mortgage insurance

Cons:

Funding fees
Investment properties do not qualify

VA Property Finance Options

A VA home refinance loan is used for a number of reasons however, the most common is to lower the payment on your existing monthly payments, take advantage of the equity in your house or have extra cash to spend on home improvements. If your thinking about refinancing your current VA mortgage loan then, you may wish to consider the following options:

VA Refinancing On The Equity In Your House

With this option you can refinance your existing VA mortgage at a lower rate of interest and release part of the equity tied up in your home to release extra cash flow. This extra income can be used to pay for your children's college education, go on holiday, build an extension or even pay your outstanding debts.

A common way to release the equity is through a cash-out refinancing program. Cash out refinancing is the term used to describe a person refinancing their VA mortgage and keeping the difference. It works like a replacement mortgage.

VA Streamline Refinance

If your looking for lower refinance mortgage rates then, a VA home streamline loan can enable you to do that. This type of refinancing is only eligible to existing VA homeowners. A key benefit is that there no low fees attached.

In certain cases you may not even need an appraisal which also has the added benefit of making VA streamline loans much quicker to process compared to private loans. In certain cases lenders can offer to cover the costs by offering you a slightly higher interest rate.

VA Refinance Funding Fees

One time funding fees can be applied to a refinancing loan. The fee can range between a 1/2 and 3 %. People can merge the fees into the overall loan if they cannot afford to pay it straight away. In this way they pay it over the duration of the loan. Even though 1 or 2 % does not seen like a lot, it can mount up over the duration of the loan. On a 30 year $130,000 loan at 6% and extra 2% fee financed over the duration of the loan would add an extra $14,000 to the principal amount.

VA Home Finance And Your Credit History

Although VA home purchase loans are more flexible and your credit score does not affect your eligibility however, having a good credit history can. A VA approved lender will look at your previous 12 month record to determine if your a good candidate for a loan.

So what is a good credit history? A good credit history means that over the last 12 months you have been responsible in the way you pay back your debts. You have paid your bills on time and in full. There are no missed payments or defaults on your credit record. These negative records including foreclosures and bankruptcy would affect your ability to obtain a VA loan or refinancing.

VA finance loans have a reputation for lower mortgage interest rates and the added benefits of not having to put provide a down payments and lower fees however, even if you qualify for one this should not stop you shopping around for a cheaper deal elsewhere. If you cannot find a good deal from any of the private lenders then a VA home refinance loan is definitely worth consideration.

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