The VA’s Cash-Out Refinance Loan is available for active duty military personnel, a qualified veteran, or a spouse of either. It is specifically for veterans who seek to take cash out of their home equity to consolidate alternative expenses. These expenses can range from paying off high-interest debt to making home improvements.
VA Home Loan and Refinance Advantages
The VA guarantee allows lenders to provide you with more favorable terms, including:
|No private mortgage insurance premium requirementVA rules limit the amount you can be charged for closing costsWe won’t charge you a penalty fee if you pay the loan off earlyVA may be able to provide you some assistance if you run into difficulty making payments|
You should also know that:
|You can reuse the benefitVA-backed loans are assumable, as long as the person assuming the loan qualifies|
VA Cash-Out Eligibility
You must meet three factors to be eligible:
|Suitable credit (620 minimum)Sufficient income.Valid Certificate of Eligibility.|
To obtain a COE, you must have been discharged under conditions other than dishonorable and meet the service requirements
The funding fee is a percentage of the loan amount which varies based on the type of loan and your military category, if you are a first-time or subsequent loan user, and whether you make a down payment.
You do not have to pay a fee if you are:
|Receiving VA compensation for a service-connected disabilityEntitled to receiving compensation for a disability if you did not receive retirement or active duty payA surviving spouse of a Veteran who died in service or a service-connected disability|