There are three basic VA refinance programs available today for eligible homeowners nationwide. First, there is the VA IRRRL (Interest Rate Reduction Refinance Loan) This refinance is specifically for those who already have a VA loan and are just looking to lower their interest rate with streamlined documentation. This is a straight “rate and term” refinance, meaning no cash is going back to the borrower at closing. This is a great program because there is no appraisal, loan to value requirements and little qualifying hassle.
The second type of VA refinance is someone who has a non-VA loan and is looking to refinance into a VA loan. This has been popular for those who wanted to refinance out of either an FHA loan or a Conventional loan with mortgage insurance. VA does not have monthly mortgage insurance (PMI) and allows refinancing to 100% loan to value. The third type of refinancing is where the Veteran wants to pull some equity from their home. They may or may not already have a VA loan. Did you know that VA is the only mortgage program around today that allows 100% cash out?
With interest rates still low and home prices up, some Veterans are taking advantage and pulling cash out for making those home improvements they have wanted to make. Other reasons for pulling cash out include debt/credit card consolidation, education costs, investments, etc. There are specific restrictions for what is defined as cash out. There are different LTV (loan-to-value) restrictions for different cash out options at Five Stars. Listed below are some of the basic VA Cash Out refinance qualifying requirements:
- Borrowers must be currently employed.
- 620 or better middle credit score.
- No late payments on your mortgage over the past 12 months.
- Must be able to document income and assets.
Some Benefits of a VA Cash Out Refinance Loan:
- Up to 100% Financing (most banks and lenders will limit homeowners to 90% LTV).
- Closing costs can be rolled into the new loan, no out of pocket costs.
- Super low 30 year fixed interest rates.
- No private mortgage insurance ( PMI)
- No prepayment penalties as with all government-backed home loans.
- Streamline documentation requirements.
- Flexible credit requirements for borrowers with less than perfect credit.
100 Percent VA Cash Out Refinance Requirements:
In order to apply and qualify for a VA loan you will need to meet the following criteria and submit the following:
- COE (certificate of eligibility).
- A current home appraisal.
- 2 years tax returns and W2 if required.
- Bank Statements for 2 months.
- Paystubs for 2 months.
- *Not available in Texas.
Questions? Remember we have VA loan specialists standing by 7 days a week ready to assist you. For fast service please submit the “Request Contact” form at the top of your screen. Please also be sure to call ph: 800-871-2636 and visit our website for the latest mortgage info.