If you have an existing VA-backed home loan and want to lower your monthly mortgage payments or make them more stable, a Reduced Rate Refinance Loan (IRRRL) may be right for you. Refinancing allows you to replace with a new one with different terms. Find out if you qualify and how to apply.
A cash-out refinance loan under the VA can help you:
borrow money from the equity of your home to pay down debt, pay tuition, renovate your home or other needs, or refinance a loan with no down payment into a VA-backed loan.
With a no down payment loan, you can borrow up to the Fannie Mae/Freddie Mac limit in most areas, and even more in some high-cost counties. You can borrow more than this amount if you want to make a down payment.
When refinancing your loan, be aware of closing costs, which can run into the thousands of dollars. Make sure you understand how the new loan amount relates to the value of your home. While your lender can advise you on the costs and benefits of the deal, you should make sure you understand what you’re getting into.
To get a cash-out refinance loan, you’ll need to contact a private bank, mortgage company or credit union – not directly through us. Terms and fees may vary, so contact several lenders to check your options.
Note: Be careful when considering offers to refinance your home loan. Claims that you can skip payments or get a very low interest rate, or other terms that sound too good to be true, may be signs of a misleading offer.
You will need to show the COE to your lender as proof that you are eligible for home loan benefits.
In addition to the COE document, provide the lender with
At loan closing, you may be required to pay a VA funding fee.
This one-time fee helps lower the cost of borrowing for U.S. taxpayers because the VA home loan program does not require a down payment or monthly mortgage insurance. Your lender will charge interest on the loan in addition to the closing fee.
On Friday, September 10, 2021, the national average 30-year VA refinance APR is 2.930%. The average 30-year VA mortgage APR is 2.880%, according to Bankrate’s latest survey of the nation’s largest refinance lenders.
If your current mortgage was financed with a VA loan, you have another refinance option: an Interest Rate Reduction Refinance Loan, or IRRRL. This is used to refinance your current VA loan into a loan with a lower interest rate. You can’t get cash back with an IRRRL, but it has these advantages: