Qualified military service members and veterans have a refinancing option that allows them to lower their interest rate and get money out of the value of their home with the VA’s Cash-Out Refinancing Loan.
If you’re thinking this sounds like a home equity loan, it’s different. When you take out a home equity loan, you still have your original mortgage. The home equity loan is essentially another loan, which runs next to your mortgage. A Cash-Out Refinance Loan takes the place of your current mortgage and at the same time allows you to get cash from the equity you have in your home.
What can you expect?
In some cases, if qualified, borrowers may be able to refinance every penny of your mortgage debt. You can refinance an FHA, USDA, or a conventional loan with the Cash-Out Refinance program. One of the biggest reasons borrowers choose this option is because, once refinanced, your new loan usually has a longer repay timeframe as well as a lower interest rate.
To summarize, here’s what you need to know about the VA Cash-Out Refinance Loan:
- Fees and closing costs can be included in the new loan
- This program follows the same credit processes and underwriting as other VA programs
- Texas residents are not eligible for this program due to regulations by the state
- You do not have to take out cash, it is only on option
- You must confirm that the property you are refinancing will be occupied by you
Here are some additional benefits:
- You can use the money you get back for whatever you want
- The equity you have already built in your home provides the cash you need now
Some ideas of what you could use the cash for:
- Pay off nagging debt
- Repair your home
- Help your child out with school needs
- Handle an emergency situation
- Kitchen and bathroom remodels
- Purchase a new car or boat without taking out additional loan
- Much more!