VA Cash Out Refinancing
VA Cash Out Refinancing. An existing VA mortgage, just like any other mortgage, can be refinanced. A refinance is simply the process where one mortgage replaces another; it’s a “re-finance.” The VA home loan however is eligible for both “streamline” refinance and a standard refinance. A VA streamline refinance, sometimes referred to by the acronym IRRRL, or Interest Rate Reduction Refinance Loan, is a VA program requiring minimal documentation from the borrower as well as no need for an appraisal.
A VA streamline loan requires no income documentation, no employment verification and no credit score needed. It’s truly a streamline process. Yet if the borrower wants to pull out additional cash from the refinance, called a Cash Out refinance, the streamline option goes away. VA Cash Out Refinancing Miami
What is a VA Cash Out Refinancing Miami?
VA Cash-Out refinancing, is an option for VA liens who have two mortgages and want to refinance them into one loan, with a lower rate. Unlike the IRRRL program, this Cash-Out refinance allows the borrower to pay off the first and second loans with the new loan, while also taking cash from the home’s value. Most lenders allow the VA liens to refinance up to 100 percent of the home’s value to pay off the old mortgages. Veterans generally choose to use the VA Cash-Out over other loan types because the period to pay off the loan is extended, and also, generally comes with a lower interest rate. Just like the VA Streamline Refinance loan, the home must be used as a principal dwelling by the owner with no set period of time that you have owned. To qualify for a Cash Out refinancing you must have sufficient equity.
There are really two kinds of “cash-out”: one is where you actually get cash at closing (in the form of a check usually) and other is where you don’t actually get the cash, but you take the money and pay off other debts that are not the VA loan that you are taking out.
When to Refinancing in Miami?
VA Liens, who are considering a VA Loan refinancing, should understand that synchronization is the most important when you are refinancing a mortgage. In most cases it wouldn’t make sense to refinance a mortgage, if you don’t plan on staying in that home for the near-future, just like it wouldn’t make sense to refinance at a time when interest rates are too higher. Your goal should be to achieve a lower interest rate that cuts monthly payments, significantly, decreasing the amount of interest paid over the life of the mortgage. VA Cash Out Refinancing Miami
Do I Need to Have a VA Backed Loan to Get a VA Cash Out Refinancing Miami?
It’s a common myth, some borrowers believe that they can’t get a VA cash out refinancing unless they have a mortgage already backed by the Department of Veterans Affairs (VA). This is simply not true. In fact, you may be eligible for this type of loan even if your current loan is FHA, conventional, a USDA home loan or any other type of mortgage. Many advantages can come with switching from one of these types of loans to a mortgage backed by the VA. It may be easier to get approved than with other programs. Your monthly payments may be more affordable and you’ll get access to free mortgage counseling should your loan ever go into default. These are just some of the benefits VA borrowers can expect when they refinance from another loan program. VA Cash Out Refinancing Miami
Do I Need to Have a Current Mortgage to Get a Cash Out Refinancing Miami?
A bundle of cash can come in handy at any stage in life. If you own your home outright, you may still qualify for cash out of equity. The VA program allows for borrowers to cash out up to 100% of their home’s appraised value. Often, when a homeowner owes nothing on a mortgage, it means that the home may have been purchased a long time ago or it was inherited. A VA-approved appraiser will conduct a professional assessment of the property and compare it with other homes in the area to determine fair market value. VA Cash Out Refinancing Miami
Tips About VA Cash Out Refinancing Miami
Due to state regulations, Texas residents are not eligible for cash out refinances.
- For those refinancing from a conventional or other mortgage program, you don’t require to take any cash out.
- Cash-Out Refinance loans follow the standard VA Loan underwriting and credit process.
- The closing costs and funding fee can be rolled into the entire loan amount.
- You must certify that you intend to occupy the property being refinanced.
Persons Who May Qualify for a VA Cash Out Refinancing Miami?
- Eligible veterans.
- Active duty service members.
- Current Reserve and National Guard members (usually after 6 years of reserve service).
- Honorably discharged servicemembers.
- Certain surviving spouses.
VA Cash Out Refinancing Miami Loan Limits
The VA cash out program follows the same maximum lending limits as the VA loan to purchase a home. The standard limit is $417,000 but goes up to $721,050 in high-cost counties in Hawaii, California, Alaska, and other states. VA Cash Out Refinancing Miami
Benefits of the VA Cash Out Refinance Miami include:
- Finance up to 100% loan-to-value (LTV).
- Loan can be structured with no out-of-pocket costs.
- Low 2.15 – 3.3%funding fee (unless exempt).
- A VA cash out loan can pay off any type of home loan.
VA Cash Out Refinancing Miami Requirements
The VA cash out refinancing is a full documentation refinance (unlike the VA streamline refinance or VA IRRRL). Furthermore, you will need to be ready to provide a full documentation package to the lender which in addition to the application can include things like:
- Bank Statements.
- An appraisal.
- Tax returns.
VA Cash Out Funding Fee
When you do a VA cash out refinance Miami; the VA funding fee is higher than the VA streamline refinance program. Typically the funding fee for a VA cash out refinance is 2.15% of the loan amount for an active duty service member or veteran with eligible service time. Additionally, it is possible that this VA funding fee is higher if you have used the VA loan benefit before or if you are in the National Guard or the reserves. VA Cash Out Refinancing Miami