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VA Refinance Loans – Overview

Most people have additional cash needs from time to time.  The Veterans Administration has thought of that and will permit you to refinance a mortgage, assuming that you qualify based upon your military service and your financial situation.

Almost anything reasonable can be your motivation for refinancing your existing mortgage.  Things like:

  • Taking advantage of a lower interest rate environment to reduce your monthly payments.
  • Paying for college or additional education.
  • Make home improvements.
  • To pay medical bills.
  • Starting a new business.
  • etc.

There are two types of VA Refinance Loans.  Which kind that you will apply for depends upon your individual circumstances.  Talk to your loan officer and the Veterans Administration about your needs.  I’m sure they can help!

Cash Out VA Refinance Loans

The first type of VA Refinance Loans lets you use the existing equity in your home as collateral for the loan.  This type of loan will pay off your existing mortgage with the new refinance loan.  Then, whatever is left can be taken as “Cash Out”.

With a “Cash Out” VA Refinance Loan, you can borrow up to 90% of the appraised value of your home plus the closing costs if it will not cause you to not be able to qualify financially.  This type of VA Refinance Loan is NOT available in Texas.  <click here> to see the detail article about the VA Cash Out Refinance Loan.

VA Streamline Refinance Loans

The second type of VA Refinance Loans is called a VA Streamline Refinance.  The objective of a Streamline Refinance is to get the homeowner into a lower interest rate than they are currently paying.  It’s major advantage is that it will cost the borrower little or no out-of-pocket expense.

The only individuals who are eligible for a VA Streamline Refinance Loan are veterans who are refinancing their original VA mortgage that they obtained with their original eligibility. <click here> to see the detail article about the VA Streamline Refinance Loan.