Veterans in St. Augustine have some great VA refinance options available in 2015 -2016. Depending on your current needs and equity situation, The VA IRRRL Streamline refinance or 100% VA Cash Out could make sense. Let’s take a closer took below at both options available to homeowners in St. Augustine FL.
VA IRRRL “Streamline” Refinance Mortgage
A VA IRRRL loan is also referred to as “Streamline” refinance. The Streamline Refinance guidelines are very simple and straight-forward with little paperwork – hence the name “streamline” No cash can be taken out by the homeowner with this type of VA refinance. Closing costs and energy efficiency improvement costs can be included into the new loan in most cases. VA IRRRL guidelines do not require the lender to perform a new appraisal or credit, income underwriting as long as the loan that is being refinanced was also a VA guaranteed loan. The is huge because borrowers can be upside down or “underwater” on their home loan, it’s doesn’t matter. Borrowers that just want to lower their interest rate, change loan term or convert their current VA ARM loan to a VA Fixed rate loan can qualify for the streamline refinance mortgage. Contact us below to discuss current VA interest rates.
IRRRL streamline loans are not assumable. No cash back is allowed even if you do have equity, just standard closing costs can be included in the new refinance loan. Second loans or home equity loans (HELOC) existing on the property must be subordinated to the new VA first mortgage. Mortgage interest rates are still near historical lows, veterans can lock-in their rates by opting for a streamline loan offered by a VA refinancing lender. This loans $0 cost option is the primary driver of its popularity among veteran home owners looking for “rate and term” refinance. One should carefully understand the specific refinance option’s guidelines and requirements to choose the appropriate option that fits their financing needs.
VA Streamline (IRRRL) Refinance Guidelines
VA basically provides the backing for the lender providing financing to the veteran and issues its lending guidelines and requirements. A veteran seeking a VA guaranteed home loan must qualify based on the financing lenders underwriting requirements related to income, credit and assets. A lender can choose to enforce their own criteria (overlays) while evaluating a prospective borrower’s financial profile. VA loan eligibility depends primarily on the debt-to-income ratio. The residual income left for the household after paying for all the housing related expenses, monthly debt payments and taxes is used by approved VA lenders to determine the eligibility of prospective seekers of a VA insured mortgage loan. The residual evaluation followed in VA underwriting is much preferred to the plain vanilla debt-to-income ratio used in conventional residential lending guidelines.
When it is required, it’s the responsibility of a VA mortgage lender to thoroughly assess the eligible veteran’s financial profile and insure it meets the VA residential lending guidelines. A VA loan eligible borrower should collect all the documentation that substantiates these requirements to speed up the loan approval process on both purchase and refinance transactions.
Mortgage lenders that finance residential properties based on conventional mortgage guidelines usually require a borrower to pay for Private Mortgage Insurance when a high loan to value (LTV) home loan is involved. However, VA allows 100% financing with no requirement of PMI on the loans they guarantee. Instead, an upfront funding fee is assessed on all VA purchase and refinance loan transactions. Veterans receiving disability compensation related to the service are exempt from paying the VA funding fee.
Veterans Administration does not handle the loan process or provide the actual funds involved in VA home financing. All factors related to the loan pre-qualification and approvals are exclusively handled by the approved VA lender originating the residential loan. A VA lender also handles all the paperwork and documentation, not VA department. Lenders also pre-qualify, complete loan application, gather supporting financial documents, order the appraisal (when needed) and title, schedule a closing date and fund the loan. These steps performed during the VA loan approval are comparable to those followed in other government financing like FHA and USDA
The interest rates and discount points charged by lenders for financing VA home loans vary greatly according to applicants credit score and application profile. Borrowers will have both fixed rate and adjustable rate financing terms available. VA lending guidelines clearly emphasize the occupancy requirement. Only properties to be occupied as a primary residence by the veteran after purchase can be financed through a VA loan program. The primary residence requirement can be waived for borrowers seeking faster financing through the streamlined VA IRRRL loan.
VA loan benefits can also be reused in the future. The home loan benefits offered by VA do not end after just using them once. Any unused portion of the loan benefit gets carried forward. All state, county and local housing programs or grants have blanket approval from VA. Due to this they can be utilized in combination with VA home loan programs without special permission or review. Grants and programs that are offered to buyers by other non-public entities must be approved by VA before the closing.
The guaranty provided by VA only applies to the lender underwriting and funding the home loan for an eligible veteran. A thorough house inspection is the best way for the buyer to make sure that no significant issues have been overlooked. An appraisal cannot be considered as a substitute for a home inspection as the former a qualified opinion regarding the value of the property based on a rough overview of the property condition, local market and recent sales, while the latter primarily assesses the physical condition of the property by highlighting any issues that needs attention.
VA Cash-out Refinance Guidelines
For St. Augustine VA borrowers that DO have significant equity, a VA cash out refi may be the perfect way to consolidate other high interest debt. 100% VA cash out refinance loan allows a qualifying veteran to payoff high interest debt credit cards, college loans and any other debt. One may also use refinancing to make further home improvements to increase their residential home value. A number of VA lenders process these loans quickly and efficiently according to the refinancing guidelines set by Veterans Administration. The VA cash out refinance program will require a new appraisal to verify the property current value.
VA cash-out refinance guidelines require that the veteran still occupy the property as their primary residence. When sufficient home equity is present, the owner can take out up to 100% of the homes value. This loan can also include closing costs and other fees. As long as the LTV requirement is met, the seasoning of the loan may not be needed. For exact VA refinance guidelines, Contact us below 7 days a week.
Serving all of St. Johns and surrounding counties – Crescent Beach, Fruit Cove, Hastings, Orangedale, Ponte Vedra, St. Augustine, Julington Creek, Vilano Beach
Questions about starting the VA mortgage process? VA Home owners in St. Augustine – St. Johns County can submit the “Request Information” form at the top right side of your screen. Mobile users can find the short Request Info Form here. Or just call ph: 800-871-2636
St. Augustine VA Refinance – Five Stars Mortgage News