VA Refinance Loans: What You Need to Know
Are you looking for a VA refinance loan? If so, you will need to learn about the different types of options available. In this article, we will go over what they are and how they work. Some people may be wondering if it is worth their time to get a VA refinance loan or not. These loans come with certain benefits that make them an excellent choice for many veterans! The Moreira Team can help you understand the differences and guide you through this process.
Why Should I Get a VA Refinance Loan?
When considering a VA loan refinance, consider the following benefits. You should save money on your mortgage. Additionally, you will have lower payments. The interest rate of a VA loan refinance can be fixed or adjustable, with the latter giving you more flexibility and control over your mortgage payment.
Additionally, if the value of your property has increased since you purchased it, then this is another benefit to consider for a VA refinance loan!
Building equity in your home is one of the most satisfying aspects of owning a home, and with VA loan refinance you can achieve this quicker.
What Type of VA Refinance Loan Should I Get?
VA Streamline Refinance (IRRRL)
Refinancing your home might be perfect if you have little equity in it. You will pay more interest, but you will also save money on your monthly mortgage payments. The disadvantage is that you can’t deduct the interest costs like you would when doing a cash-out refinancing.
The main advantage of this option is that you can qualify even if you owe more than your house is worth because it doesn’t need an appraisal and credit check like other types of refinancing loans do.
This type of VA refinance loan is also known as “The VA Interest Rate Reduction Refinance Loan” (IRRRL). This is designed to lower your interest rate by refinancing your existing VA loan. If you want to lower interest rates on your VA loan, the VA Refinance has made it easier for you. You can refinance your loan and get a lower interest rate.
VA Loan Refinance Cash-Out
Another VA refinance option is the cash-out refinance. This type of VA loan allows you to take all the equity out of your home and then use it for a whole new purpose, like consolidating debt or funding retirement.
To get this option, but, there are some stipulations that must be met: You have to have 20% equity in the property. You will also have to give up the VA loan benefit.
If you don’t meet these requirements, consider a cash-out refinance without giving up your VA home equity.
What are Current VA Loan Refinance Rates?
VA refinance rates depend on the type of VA loan for which the rates are being calculated. For instance, home buyers with an existing VA mortgage can take advantage of a VA Streamline Refinance (IRRRL).
VA refinance rates for IRRRL are currently:
- 990% (3.145% annual percentage rate APR) 30-year fixed rate term
- 500% interest rate (2.799% interest rate APR) for a 15 year fixed rate loan type.
VA refinance cash-out rates are as follows:
- 990% interest (3.284% interest rate APR) 30 year fixed rate term
- 500% (3.049% APR) interest rates for a 15-year term.
How Soon Can a VA Loan Be Refinanced?
If you’re looking to refinance or switch from a VA loan to another, there’s now a small waiting period of 210 days. This is measured when you pay on your mortgage, the time it takes to pay off is from the day you make your first payment until the day of closing with a new loan.
We recommend speaking with one of our professionals to see what you qualify for and if a VA refinance loan is right for you. The Moreira Team can help you find the type of loan that would work best for your needs.