Veterans have two main options when looking at refinancing. The VA Cashout refinance and the VA IRRRL. In this article we will take a closer look at the cash out. So what is a VA cash-out refinance and how can you use it as a Financial Tool? Are you discovering that there is more month than money? You are not alone. Many veterans feel like they are robbing Peter to pay Paul? We’ve all heard this before and likely been in that financial position. Paying the bills or just “getting by” is admirable but is that all there is? Honestly, here at National VA Loans we don’t believe that’s all there is, we believe you can have more and, as a man or woman that fought for our country you deserve it! If you find yourself in the position where there is more month than money, a VA Cash-out Refinance option is a great way to tap into your home equity and right your financial ship.
What is the VA Cash-Out Refinancing Program?
The US government, through the Department of Veterans Affairs makes it possible to get access to 100% of your home equity through the VA Cash-Out Refinancing loan program. The VA cash out is a VA refinance program for Veterans who currently own a home and need access to the home equity for debt consolidation, home improvements, or savings, among many other things. The VA home loans are typically provided by private lenders, though VA guarantees 25% of the loan amount. Therefore, if something goes wrong and you can no longer make your payments, the VA loan guaranty will cover any claims brought forth by the lender. The cash out refinancing program is a comprehensive program that works for any veteran with an existing conventional loan, VA home loan, or any veteran with equity in their home.
Who Is Eligible for the VA Cash Out Refinance?
Both current and former United States Armed Forces service men and women are eligible for the program. Men and woman that serve in the National Guard and Reserves will also qualify for VA benefits. You will also be eligible even if you currently are not serving in the armed forces, as long as you were honorably discharged and meet all the service requirements. The program is applicable to all branches of the armed forces including, the National Guard, the Reserves, the Coast Guard, the Marine Corps, the Air Force, the Navy, and the Army.
The requirements for eligibility are service for:
1) 6 years in the Reserves or the National Guard
2) 2 years as an enlisted member of the armed forces post-Vietnam
3) 90 days of service in wartime
4) 181 days of service in peacetime
5) Be a surviving unmarried spouse of a serviceman or woman
What if I own a home but don’t have a VA loan?
First, let me apologize that you didn’t get the opportunity to use your VA benefit. Unfortunately, there are too many mortgage companies and loan officers that are either not trained or don’t offer VA home loans. Second, It’s ok! It’s ok if you currently have an FHA, Conforming, USDA, or any other type of loan. Don’t wait any longer to take advantage of your benefits. You can still use your VA benefit and get access to 100% of your equity!
What are the advantages of a VA Cash-out Refinance?
There are several advantages to the VA Cash-Out Refinancing program. These include:
1) 100% access to your home equity.
2) No out of pocket expenses.
3) Loan costs are regulated by the VA and are typically less than other loans.
4) Unlike conventional loans over 80% loan to value (LTV), you will not pay Private Mortgage Insurance.
5) The loan can be structured so that your costs associated with the loan will be “rolled” into the loan.
6) Your VA home loan may be assumable with qualifying borrowers.
7) Your benefits can be used by your spouse in the event of the Veterans death. The VA makes it easily accessible to the men and women who serve our country!
In closing, It is recommended to do a financial assessment to evalute your total debts. If you have credit card debt, personal loans, or just want a lower house payment a VA Cash-Out Refinance may be what you are looking for. If you would like to discuss your options and talk with a licensed VA home loan lender call 855-956-4040.