In this week’s blog, we’re diving into VA loan refinance options to save money or turn home equity into cash. Much like conventional loan refinancing, there are both rate-and-term and cash-out VA loan refinancing options. When you work with a qualified lending agent, refinancing doesn’t have to be a difficult process and may cost you nothing out of pocket initially. Read on to learn more about VA loan refinancing and contact Nickel City Funding for a free quote if you live in North Tonawanda, Hamburg, Amherst, West Seneca, Lancaster, or surrounding New York.
Refinancing to a Lower Rate
The VA Interest Rate Reduction Refinance Loan, commonly known as VA IRRRL or VA Streamline Refinance, is a VA-sponsored, minimal hassle refinance option. VA IRRRLs have minimal paperwork and minimal or no out-of-pocket costs. They’re designed to save you money with a lower interest rate and/or preferable term.
VA IRRRL loans have several benefits:
- A new appraisal and credit check are not required for approval. You also are not required to obtain a new certificate of eligibility (COE).
- Closing costs and the VA funding fee can be rolled in to your loan, which allows for no upfront refinancing costs.
- A VA IRRRL must save you money over time. In some cases, this may mean a higher interest rate at first if you are switching from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
It’s important to note that you cannot receive any cash payout from a VA IRRRL. If you’re in need of cash in exchange for part of your home equity, you should consider a VA cash-out refinance instead.
Refinancing for Cash in Hand
A VA cash-out refinance provides qualified veterans the opportunity to extract cash from their home equity in exchange for higher-value loan. In many cases, VA cash-out refinance also have lower interest rates, as well.
VA cash-out refinance benefits include:
- Borrowers have the option to refinance up to 100% of a home’s value.
- Cash-out refinance has minimal funding fees, which may be incorporated into the loan if a borrower chooses.
- The cash raised in exchange for equity may be used to pay off other high-interest debts or other expenses and save the client money over time.
- Cash-out refinancing can also result in a lower interest rate to save long-term.
Because these loans do increase the debt that you owe, it’s important that you think carefully about if cash-out refinancing or another loan option is best for you. If you’re simply looking for a better rate, or a longer or shorter term, a VA IRRRL may suit you better.
Refinancing Can Be Stress Free
When you’re ready to look further into VA IRRRL or VA cash-out refinancing, the mortgage pros at Nickel City Funding are here to answer your questions. VA loan refinancing doesn’t have to be a stressful or drawn-out process, and it could help you save over time or get much-needed cash in hand now. If you live in North Tonawanda, Hamburg, Amherst, West Seneca, or Lancaster, contact us for a free quote today.