The Veterans Association (VA) Home Loan has the perfect formula for homeowners. They can convert their existing loans into better rates through simple means and thereby bring down their monthly payments. After a refinance, military applicants can opt to use the funds they have saved in the process to facilitate other domestic needs like refurbishments, through cash back options. They can also dispose off other miscellaneous debts by the same means. This is now doubt the best time, if ever, for a veteran to jump ship from a current mortgage and into an easier option: VA refinance.
There are two options in the program that can facilitate the VA Refinance procedure, depending on one’s financial situation. These include:
- VA Streamline Refinance (Interest Rate Reduction Refinance Loan (IRRRL).
- VA Cash-Out Refinance.
The Streamline financing works best for veterans who are currently settling an existing VA loan. It effectively reduces the monthly payments. It is paper-free and without cash charges. The mortgagors can even include their closing costs in the principal amount of the mortgage, thereby escaping upfront liability. It is also easy to get a Streamline Refinance that is free from a home appraisal.
The Cash-Out Refinance on the other hand is of reverse mortgage scope because it enables veterans to take advantage of their home equity and make use of it in form of cash. All veterans are eligible for this option as long as they have an existing mortgage, even where they have other financial commitments with the Federal Housing Administration (FHA), United States Department of Agriculture or any other conventional loan scheme.
It is now easy to see why the current economic dispensation enabling low interest margins places veteran families in a good position to rethink their existing mortgages for better payment.
Here is a tabular representation of the two options.
Cash-Out Refinance
This refinance option is appropriate for military families with a current VA or conventional loan who want to capitalize on their home equity and use the cash to repay debts, repair homes, attend to emergencies etc.
VA IRRL
More popular as a Streamline Refinance, this scheme is right for veterans with a current VA loan who want to benefit from low interest rates and make good savings.
Eligibility
- You can qualify for this refinance scheme if you have ever been on the war front for at least three months or a hundred and eighty one days in peacetime.
- National Guard veterans as well as Reservists should have served for a minimum of 6 years.
- Wives or husbands of military personnel who have undergone maiming or passed on in the line of duty also qualify.
- You must be operating a current VA loan in order to qualify for this option.