There are two basic types of refinance loans. Cash-Out and No-Cash-Out. There are also special VA Streamline Refinance loans available to anyone with a current VA mortgage. VA Streamlines are known for their incredibly fast and easy qualification process, but for now let's talk about the more conventional refinancing options.
No-Cash-Out VA Refinance
This VA loan is also referred to as a Rate and Term loan. The best reason for a borrower to choose a Rate and Term VA Refinance loan is to lock in a favorable interest rate. Let's say for now that you purchased your home at a competitive rate and have a 30-yr fixed rate and that you've been paying on this loan for 5 years already. Now interest rates drop suddenly and you would like to refinance into a lower monthly payment but don't need any extra cash from your home's equity. If this scenario sounds familiar, then a No-Cash-Out VA Refinance is in your best interest.
Cash-Out VA Refinance
Some of the most common purposes for taking cash out against your home's equity include Home Improvements and Debt Consolidation, but the money you borrow based on the difference between your home's mortgage balance and resale value can be put toward anything you want!. And let's face it, even the best of us fall on tough times at some point in our lives. When this occurs, it is imperative to have extracted the idle equity from your mortgage before the damage that financial hardships can cause to your ability to qualify for loans is done. And VArefiCENTER is not a qualified tax advisor, but we'd like you to take a second or two to think about the fact that NO credit card or revolving account's interest is tax deductible, while most mortgage interest IS. What that means to you is that consolidating your bad debts into solid VA mortgage terms is a great way to leverage your finances.
Fill out our quick online application to be contacted by a VA Loan Specialist that can help you decide what type of VA refinance will be the best for you!
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