VA Loan VA What Is Refinancing Miami
Refinancing your mortgage can help your household in a myriad of ways. VA Loan VA What Is Refinancing
A refinance loan can lower your monthly payment; it can get you “cash out” for improvements or repairs; and, it can provide some other tangible benefit such as reducing your loan’s term from 30 years to 15 years.
When you refinance into a new VA loan, though, you get extra benefits.
VA loans require no mortgage insurance over 80% loan-to-value (LTV), carry no prepayment penalty, and include an assumption feature that lets you transfer your VA loan to another VA-eligible borrower whenever you decide to sell your home.
VA mortgage rates are lower than rates for other loan types, too. For example, VA mortgage rates have averaged more than 35 basis points (0.35%) lower than comparable conventional rates over the past 12 months and roughly 15 basis points (0.15%) lower than comparable FHA rates. VA Loan VA What Is Refinancing
Best of all, you can refinance via the VA even if your current loan isn’t a VA one.
VA Loan VA What is Refinancing in Miami?
Through the VA Loan, eligible veterans, service members and surviving spouses of service members have access to special refinancing options designed to lower monthly mortgage costs or provide the ability take cash out of a home’s equity in Miami. Now you won’t think again, VA Loan VA What is Refinancing in Miami.
Benefits of VA Loan Refinancing in Miami
Those interested in Miami in reducing their mortgage rate should consider the VA Streamline refinancing, otherwise known as an IRRRL (interest rate reduction refinance loan). With the VA Streamline, home buyers have the opportunity to lower their interest rate, providing additional cash flow each month.
Additionally, homeowners of Miami have the ability to change the terms of their loan, switching from an adjustable rate to a fixed-rate, or a 30 year to a 15-year loan in order to pay off their mortgage sooner.
Those contemplating taking cash out of their home’s equity should consider the VA Cash-Out refinance. With the Cash-Out refinance, home buyers can use the equity in their home to help pay other obligations.
Additionally, home buyers in Miami wanting to refinance from a different loan program into the VA Loan can do this through the Cash-Out refinance program.
VA Interest Rate Reduction Refinancing in Miami
The VA Streamline, which is officially known as an Interest Rate Reduction Refinance Loan, or IRRRL, was created so that eligible homeowners had the opportunity to receive a lower rate and decrease monthly expenses.
In order to qualify, the homeowner in Miami is required to currently have a VA Loan and must also receive a lower interest rate and lower monthly payments with the refinance. That is unless the borrower is refinancing an adjustable rate mortgage to a fixed rate. VA Loan VA What Is Refinancing Miami.
The VA does not require a credit check or home appraisal to receive a VA Streamline Refinance; however, in today’s lending climate, those considering a Streamline Refinance should expect lenders to look at credit scores as well as order a home appraisal.
With the Streamline Refinance, origination fees and total costs are capped to keep the up-front costs as low as possible for the homeowner of Miami.
VA Cash Out Refinancing Miami
Another popular in Miami refinancing option is the VA Cash-Out Refinance, which allows you to tap into your home’s equity and extract cash. Borrowers aren’t required to have a VA Loan in order to choose this option; many homeowners in Miami use the cash-out option to refinance from an FHA or conventional loan.
Qualified homeowners in Miami may be able to refinance up to 100 percent of their home’s loan-to-value and use the proceeds for home repairs, remodeling, and other needs.
When to Refinance
Homeowners considering a VA Loan refinance in Miami should understand that timing is everything when refinancing a mortgage.
In most cases in Miami, 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 soaring.
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.
Refinancing VA Loans: Reducing Your Mortgage
Homes are expensive, and paying off loans takes a great deal of time and money. Any veteran thinking about refinancing their house, or who just needs a way to reduce their interest rates, should look into an Interest Rate Reduction Refinance Loan (IRRRL), which can reduce the interest rate when a VA home loan is refinanced.
This loan is only an option on real estate that was originally purchased with a VA loan, but they’re relatively easy to acquire in Miami. If you currently have an adjustable rate mortgage, you may opt for a fixed mortgage rate when applying for the IRRRL. There’s no appraisal, credit underwriting, or certificate of eligibility requirement, and you don’t need to use any money out-of-pocket.
Currently, in Miami, interest rates on these loans are low, so it’s worth learning about refinancing opportunities. Frank Nothaft, vice president and chief economist at Freddie Mac. says that “On average, borrowers who refinanced reduced their interest rate by about 1.8 percentage points.” This means that, on average, homeowners save about 33 percent on their interest rates. VA Loan VA What Is Refinancing
Below are some more details about qualifying for and using an IRRRL, from the Miami VA Loan Center:
The new loan must be at a lesser interest rate than the old VA loan except when refinancing an existing adjustable rate mortgage with a new fixed rate mortgage.
The dollar amount of guaranty applicable to the prior VA loan is transferred to the new loan.
The minimum guaranty on an IRRRL is 25%.
If the existing loan is delinquent, the IRRRL must be submitted to VA for prior approval. VA Loan VA What Is Refinancing
Although no underwriting is required, approval of new credit may be required by the trustee in a Chapter 13 bankruptcy.
The veteran may not obtain cash proceeds.
No portion of the loan proceeds may be used to pay off other debts.
The new loan is limited to the balance of the old loan, the funding fee, up to $6,000 of energy efficient improvements, and allowable closing costs including not more than 2 discount points.
The term of an IRRRL may not exceed the original term of the loan being refinanced by more than 10 years.
The veteran, including active-duty service members stationed elsewhere, is able to satisfy the occupancy requirement by certifying prior occupancy.
If the veteran whose entitlement was previously used has died, and the surviving spouse was a co-obligor, that spouse is considered a veteran for the purpose of the IRRRL. VA Loan VA What Is Refinancing
Is Refinancing Worth Your While?
Deep interest rate cuts have many homeowners rushing to refinance their home mortgage loans in Miami. And while refinancing can be a budget booster, you need to look beyond low rates to make the decision that’s right for you.
The Break-Even Point
A refinanced mortgage pays off your existing loan, replacing it with a new one, so expect to go through the same closing process as you did for your original mortgage. But before committing, examine the deal and calculate your break-even point: How long will it take you to realize the savings you’re looking for? Divide the total cost to refinance by the amount you’ll save on your new monthly loan payment. The result is the number of months it will take you to recover any refinancing costs:
- Refinance costs (fees, etc.): $2,175
- Monthly savings: $115
- Break-even point: 19 months
Use a mortgage calculator to do your preliminary homework, that means getting “good faith” estimates from the top lenders on your list of Miami, which will detail all fees and costs associated with each loan offer. VA Loan VA What Is Refinancing
“You will have to do an application for each lender, but it’s the only way to see what you’re getting. What looks like a competitive deal because of a low-interest rate can cost you thousands more in fees, while the lender with the slightly higher interest rate is actually the better deal.”
Once you’ve found a lender, “locking in” a rate ensures that you’ll get the rate quoted on the day you lock it in, even if you don’t close for several months. You’re protecting your deal in case rates go back up, but if rates continue to go down, you’re committed to your locked-in rate. Some lenders in Miami charge a lock-in fee — generally the longer the lock-in period, the higher the fee. VA Loan VA What Is Refinancing
VA Loan VA What Is Refinancing. Refinancing Benefits in Miami
There are plenty of benefits in refinancing in Miami including:
A lower monthly payment. Refinancing with a lower monthly payment allows you to redirect more of your income to other expenses and priorities.
More equity, faster. If you have a 30-year note today, switching to a 15-year loan will quickly increase your ownership stake in the home. Although your monthly payment may be a bit higher, paying down your loan and building equity faster gives you added security, no matter which direction the real estate market turns.
Access to cash. If you are able to refinance for more than the amount owed, you can use that cash for major expenses including home improvements, college or consolidate debt.
Switch loan types. If you have an adjustable rate mortgage or another type of unconventional loan, you can find a mortgage that’s better suited to your needs.
Eliminate PMI. If your loan balance is less than 80 percent of your home’s value, private mortgage insurance (PMI) is usually not required. Removing it from your loan can add up to big savings. VA Loan VA What Is Refinancing