Refinancing with a VA Loan

In the VA Loan program, qualified homeowners may be able to lower their monthly mortgage payments by refinancing at lower rates. You may be able to get cash back when you refinance a VA Loan and use the cash to pay other debts or make changes to your home. The two programs Veterans Direct provide for refinances, are "VA Cash Out Refinance Program" and the "VA Streamline Refinance Program".

When you are looking to refinance, be sure to select the program that is right for you.

VA Streamline Refinancing (IRRRL)

The Streamline refinance, or Interest Rate Reduction Refinance Loan (IRRRL), is one of the top options for homeowners who already have a VA Loan and would like to refinance into a lower interest rate and maybe able to lower their monthly mortgage payment.

To avoid out-of-pocket costs, homeowners may be able to choose to roll the closing costs and fees into the balance of the loan.

To be eligible for a VA Streamline refinance, the property must currently be financed with a VA Loan.

VA Cash-Out Refinance

The VA's Cash-Out Refinance Loan gives qualified veterans the opportunity to refinance their conventional or VA loan into a lower rate while removing cash from the home's equity.

With the VA Cash-Out refinance, you may be able to turn the equity in your home into cash. This can be confused with a home equity loan, but unlike a second loan, the VA Cash-Out refinance loan replaces your existing mortgage instead of adding onto it.

In some cases, eligible homeowners may be able to refinance up to 100 percent of their home's value for mortgage debt. Although in other cases, homeowners may be able to refinance up to a lower percentage and use the cash to cover debt payments and other needs.

Many homeowners choose the VA Cash-Out refinance over different loans because they are offered the capability to repay the loan over a longer period. Usually, VA Cash-Out comes with a lower interest rate.