Even if you’ve already utilized your VA loan, there’s still an opportunity to improve your terms by refinancing. This process, similar to the initial home buying process, involves working with a lender to secure better terms without the need for a new home search or contract negotiations.
You already own your home but are seeking better financing, perhaps due to market rate decreases, improvements in your financial situation, or an increase in your home’s value.
Primary Methods to Refinance your VA Loan
Streamlined Refinance (IRRRL)
Also known as the Interest Rate Reduction Refinance Loan (IRRRL), this streamlined refinance option is straightforward and typically requires no out-of-pocket expenses from the homeowner. It’s ideal when interest rates have dropped since your home purchase, as it adjusts the financing terms.
Cash-Out Refinance
With a Cash-Out Refinance, you refinance your home to extract cash after paying down the loan and accumulating equity. This can be beneficial for paying off other debts, financing significant purchases, or funding home improvements.
You can apply for a cash-out refinance with a VA loan, USDA loan, FHA loan, or conventional loan. Lenders usually set limits on how much cash you can withdraw and the required equity to retain in the property.
Remember that refinancing may result in increased interest costs over the loan’s duration, so it’s essential to discuss all options with your lender before deciding. If you’re in the early stages of homeownership and interest rates have decreased, refinancing could lower your monthly payments and potentially save you money in the long run.
Contact Fiesta Home Loans to schedule an appointment today.
