Homeowners

VA Streamline or VA Cash Out Refinance: Which One is Right for You?

VA Loans help active military and veterans qualify for homeownership, and if you already have a VA loan, now is a great time to refinance at today's low rates.

Two programs can be used to refinance an existing mortgage: VA Streamline Refinance or VA Cash Out Refinance.

What is a VA Cash Out Refinance?

This particular loan allows borrowers to pull cash out of their home's equity, even if they are currently in another type of loan such as an FHA or USDA. With a VA Cash-Out, you could even pull out cash up to 100% of the home's value, including the funding fee, as long as you meet the requirements set by the VA, which is known as net tangible benefits. The cash that is pulled out of your home's equity can be used to take care of paying off debt, paying for tuition, or making necessary home improvements and repairs. It can also be used to refinance a non-VA loan into a VA loan.

What is a VA Streamline Refinance?

This loan also known as the Interest Rate Reduction Refinance Loan (IRRRL) is the best option for homeowners who already have a VA home loan and would like to refinance the loan into a lower interest rate and lower their monthly mortgage payment.

What are the VA Home Loan Requirements?

VA Loan qualifications typically require one of the following:

• 90 days of service during wartime
• 181 continuous days of active service during peacetime
• 6 or more years of service in the National Guard or Reserves
• Being the un-married, surviving spouse of a service member who died in the line of duty, or because of a service-related disability

What are VA Home Loan Benefits?

Since VA loans are approved by the government, VA loans provide access to special benefits, including:

• Lower interest rates: VA loans generally offer interest rates lower than conventional loans.
• No monthly mortgage insurance premiums: MI payments can cost borrowers hundreds of dollars every month, an expense you'll never have with a VA loan.
• No prepayment penalty: With a VA loan, you can sell or refinance at any time without having to pay a penalty.
• Ability to finance the VA funding fee: The funding fee can be rolled into the entire loan amount and the total loan with the funding fee cannot exceed your appraised value.
• Less-than-perfect credit is usually accepted: You don't need to have perfect credit to qualify for a VA loan.
• 100% cash-out refinance, including the funding fee: Use your home's value and pull cash out to pay off debt, make repairs to your home, remodel, or spend any way you wish, as long as you meet requirements set by VA known as net tangible benefits.

Ready to refinance your mortgage loan? Check out our refinancing calculator to start the process.

To learn more and find out if you qualify, contact a New American Funding Loan Officer who can help you decide which VA Refinance option is right for you.