VA Cash Out Refinance

After having carefully planned and researched, you finally close on a VA home loan thinking that this is the end of all the troubles. As the years pass, so do your family dynamics. Maybe your family has grown in numbers and it’s time to add the extra bedroom, or maybe it’s just a matter of consolidating debt to take advantage of the tax benefits. Statistics show that the average mortgage loan is kept no longer than five years. And, most Americans move within ten years of buying their first home.Like it or not, you’ll probably be refinancing; and if your considering taking cash out, then this article is for you!What is a VA cash out mortgage refinance?
In the simplest of words, this is a program that provides you with the option of cashing out the equity that has accrued on your home during your period of stay. You can use the funds as per your requirements and choosing.Before considering a VA cash out refinance, we recommend speaking to a certified mortgage planner and VA loan specialist. These people can offer you expert advice and also ensure your decision meets both your short and long term objectives. In other words, don’t just refinance your home, develop a plan that betters your financial well being and stick to it.How much cash can I receive?
Once you get your house appraisal done, you have the option to cash out up to 90% of the total amount of accrued equity in your home.Don’t confuse a VA cash out refinance with a VA streamline refinance (or VA IRRL)
One of the common mistakes people make is confuse the Cash-Out Refinance program with the streamline refinance program. These two are completely different programs.Here are the primary differences:VA Cash Out Refinance:o 3% funding fee unless exempt
o Appraisal is required
o No reported late payments for the past 12 monthsVA IRRL or VA Streamline Refinance:o .5% funding fee (can sometimes be waived)
o No appraisal required* (*NOTE: with banks changing guidelines daily, some DO require an appraisal.)
o Can have 1 late payment reported over the last 12 months.* (*NOTE: As per the banks discretion. In some cases, banks will not accept late payments.)
o NO cash can be received at closing