The VA Loan Cash-Out Refinance: What You Need to Know
Over the years, I have been fortunate to serve thousands of Veterans with all of their VA Home Loan financing needs.
Over the last 15 years, I have spoken to many Veterans and answered many questions.
This is the everyday thing I have observed: We, as Veterans, understand we have our VA Home Loan Guarantee, but we are often uninformed about the various financing strategies that can be used with the VA Home Loan.
Chief among them would be the VA Cash Out Refinance.
"Really, I did not know the VA allowed us to do a cash-out of up to 90% of the home's appraised value." That's typically how the conversation goes when I'm speaking to Veterans about refinancing their mortgage.
We take advantage of it to get into our home, but the reality is that's just the beginning when it comes to the VA Home Loan Benefit.
How This Mortage Refinance Option Works
So let's review this option and how it works. First, we need to know, as Veterans, that this is not an automatic approval. Like the last time you used your VA Home Loan, you had to qualify. You've got to do the same this time around. So gather all the W-2s, bank statements, pay stubs, tax returns, etc. and get them over to your lender because you will still have to qualify for the loan.
Now that we know that let's talk a little about the power of the VA Cash Out Refinance and how you can use it. As mentioned earlier, this is the only loan that will allow a Veteran to borrow up to 90% of the home's appraised value with no Private Mortgage Insurance.
Why Refinance Your VA Loan?
So why would a Veteran want to borrow up to 90% of the home's appraised value? Let's review a few strategies that we have implemented with our Veteran clients:
Debt consolidation
Fund a remodel / renovation
Use it to put the kids through school
Debt consolidation
By utilizing the equity in your home, you can use the VA Loan Cash Out Refinance to pay off revolving debt. We all know that credit cards often carry higher rates and higher monthly payments. By consolidating cards into one loan with a lower rate, you could possibly save hundreds, maybe even thousands, of dollars in monthly cash flow.
Fund a remodel / renovation
Utilize your VA Loan Cash Out Refinance to upgrade that kitchen you've always dreamed of having or perhaps bathrooms that need updating. Regardless of the scope of your project, this type of mortgage loan is certainly a beneficial strategy to consider. It allows a Veteran to get a low 30 Year Fixed Rate instead of having to pay cash.
Use it to put the kids through school
Got kiddos starting at the university soon? Want to start them off on the right foot, not having the burden of mounting student loan debt? This type of mortgage loan allows a Veteran to use the proceeds from the cash-out refinance and pay for the kiddies' schooling as they see fit.
Whatever the reason, remember Veterans that we will always have access to this type of refinance mortgage loan. Oh, and one more thing…it does not have to be a VA Loan currently. In other words, let's say you're making payments on a Conventional Loan, and you want to utilize the VA Cash-Out – no worries at all.
Find a VA Loan Expert
There is one last (and perhaps most important) thing for Veterans to keep in mind. It is that it's crucial to make sure you roger up with a lender who understands the VA Home Loan process and will ensure your VA Loan Cash-Out Refinance goes off without a hitch.
For more questions and answers regarding VA home loan benefits, feel free to call my office direct at 602-908-5849.
