Refinancing With
a VA Loan

Lower your mortgage payments and access your home’s equity.

Homeowners choose to refinance their home in order to secure a lower interest rate or get cash back to finance a big purchase. With a refinance, you are rebuying your own home with a new mortgage. This new mortgage can have a lower interest rate, a higher loan amount than you currently owe (if pulling out cash), or both!

This new mortgage, the "refinance", is the process of paying off your old mortgage with a new loan. With a VA Loan you can either lower your interest rate with an Interest Rate Refinance Reduction Loan (IRRRL) or pull out cash from the equity in your house, which is known as a Cash-Out Refinance.

Cash-Out Refinances

There are a number of reasons why one would use a cash-out refinance, including paying off debt, upgrades or renovations to your home, emergencies, or simply pulling out cash for other ventures. In order to be qualified to use a cash-out refinance, the equity in your home must be equal-to or greater-than the amount of money you wish to pull out or use, plus the costs associated with facilitating the refinance, known as closing costs.

Equity is the difference in the value of your home, and the amount of money you owe against it.

For example: Let's assume you bought your house for $200,000 a couple of years ago. During that time, you have made your regularly scheduled payments, and the market for home sales has gone up. Today, your home could be worth $240,000. Along with the increase in price, you have paid it down $20,000. In this scenario you have around $60,000 in equity that can be pulled out and used for any of the things mentioned previously.

Depending on the length of time from when you first bought your home to when you are trying to use a cash-out refinance, you will likely be required to order a termite inspection as well as an appraisal just like when you originally bought the house.

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IRRRL Streamline Refinance

Another refinance option with a VA Loan is the IRRRL. The IRRRL was created by the VA to allow veterans the ability to capitalize on lower interest rates available today that may not have been available at the time of purchasing the house.

Qualifying for and facilitating an IRRRL is much simpler than a cash-out refinance due to the understanding that the veteran's overall monthly payment will be going down. It is assumed that if the veteran was able to qualify for the purchase at a higher interest rate, then they will also be able to qualify for the IRRRL at a lower interest rate and monthly payment. The only way to use an IRRRL is if the current mortgage is also a VA Loan.

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My family and I appreciate Military Home Spot Lending for helping us refinance.

They made the process easy and painless. Thanks again.

- Brian H Washington and family, U.S. Navy

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