Want to Refinance Your Veterans Association Loan? Here’s How

Want to Refinance Your Veterans Association Loan? Here’s How

We all want to get out of debt faster, but it can be hard to figure out how. One of the best ways to do so is to reevaluate how your loans are working for you. If you’re a veteran or even a veteran’s spouse, you have tons of options open to you. Refinancing your Veterans’ Association Loan can be a great way to make your finances just that much easier to handle. Here are some options you may want to consider.

Am I Qualified For A Veterans Association Loan?

Knowing if you qualify for a refinancing of your Veterans’ Association Loan can be tough. There’s so many different potential financial situations, as well as different career trajectories in the military, that it can seem daunting to figure it out. Fortunately, understanding what you’re entitled to is actually fairly simple.

 If you served in the military for more than ninety consecutive days during wartime on active duty, or if you served in the military for more than one hundred and eighty-one days during peacetime, you will qualify for refinancing. If you were not on active duty, for example if you were in the National Guard or in the Reservists, you will be eligible for refinancing of your Veterans’ Association Loan after at least six years of service. Spouses of those veterans who died while on active duty or from a service-related disability may also be eligible, although this does depend on the individual case.

What Kind Of Loan Are Available Through The Veterans Association?

There are a few different kinds of refinancing of Veterans’ Association Loans that veterans can choose from:

The Interest Rate Reduction Refinance Loan, or streamline refinance option, is the option that requires the least paperwork, making it ideal for those new to the process. There is also no documentation of income required, meaning you won’t need to go hunting for paycheck stubs or W-2 forms. You don’t even have to provide verification of employment or a credit report. 

The only thing the Veterans’ Association lender requires is proof that there is no more than one repayment due for over thirty days within the last twelve months. This type of refinancing lets you refinance a Veterans’ Association-backed home loan, letting you make it more affordable through a lower interest rate or through switching from an adjustable rate to a fixed rate. This is perfect for those needing a little extra help with their mortgage. 

Meanwhile, a cash-out refinance is one that will replace an existing loan with a Veterans’ Association loan, then pulls equity out of the property in question. This equity takes the form of cash, making it perfect for those who need an extra injection of money to help them reach their financial goals. The exact amount depends on the individual loan, going up to ninety per cent of the appraised value. 

Additionally, if you have an FHA loan, USDA loan or a conventional loan with PMI, you can use your Veterans’ Association cash-out refinance to get rid of mortgage insurance.  However, this loan does require extensive documentation, including paycheck stubs, W-2 forms and two years of federal tax returns. You’ll also need a debt-to-income ratio that has stayed under forty-one percent. If you have your documents in order and want an immediate financial boost, this could be the Veterans’ Association refinancing for you. 

The conventional loan to Veterans’ Association loan refinance is another option available to veterans. These loan types include FHAs and mortgages, making it perfect for anyone who is looking to capitalize on current property values. Up to ninety percent of the property value can be refinanced under this loan. This is especially important because under conventional refinancing, the appraisal value must be at least twenty-two thousand dollars over the existing mortgage for refinancing to be approved. However, there are no restrictions like this on Veterans’ Association loan refinancing. Also, the total loan amount that can be refinanced on a Veterans’ Association refinancing is up to one hundred percent of the value of the property. This is ideal for homeowners who want some additional assistance with handling their mortgage. 

Conclusion

Of course, when it comes to big financial decisions, it’s always best to do your own research. Take your time, explore what’s out there, and find out in as much detail as you can exactly what you’re signing up for. But your Veterans’ Association Loan can be one of the biggest financial difficulties on your plate. Find out how you can change it now, and with it, change your financial life for the better. 

 

References

  1. “3 Ways to Refinance to a VA Loan”, Military.com, 29th November 2021, https://www.military.com/money/va-loans/3-ways-to-refinance-va-loan.html.
  2. “Refinancing with a VA Loan”, Veterans United Home Loans, 29th November 2021, https://www.veteransunited.com/refinance/.
  3. “VA cash-out refinance rates and guidelines for 2021”, The Mortgage Reports, 29th November 2021, https://themortgagereports.com/24616/va-cash-out-refinance-guidelines-requirements-mortgage-rates.
  4. “VA Streamline Refinance (VA IRRRL): What it is and How it Works”, NextAdvisor, 29th November 2021, https://time.com/nextadvisor/mortgages/refinance/va-streamline-refinance-or-irrrl/.
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