There are many benefits to refinancing your home: lower interest rates, pulling cash out, paying the loan off faster. But refinancing with a VA loan adds much to the equation.
Even as interest rates continue to rise, it’s still a good time for veterans to buy or refinance a home. It’s important to note that the VA is not a direct lender, but instead guarantees loans from lenders like us.
If you’re eligible for a VA loan (see requirements here) here are some of the most important things to know:
- You can’t be denied based on credit: One of the greatest benefits of a VA loan is that it cannot be denied on a basis of poor credit alone. And, most lenders don’t tie interest rates on VA loans to credit scores. The VA loan program will usually only look at your last 12 months of credit history unless you have a bankruptcy or tax lien on your credit report.
- Streamline refinances mean you don’t have to re-qualify: The IRRRL, or interest rate reduction refinance loan, streamline is one of the VA program’s best kept secrets. This program allows veterans to refinance their current VA mortgages into a lower interest rate without going through an entire application process.
- Low or no funding fees: VA borrowers who have a service-related disability may qualify for discount or no funding fee loans. Lenders may waive or discount their service fees for injured vets, which further decrease the cost of the loan.
Of course, just like when buying a home with a VA loan, refinances require a Certificate of Eligibility (COE), which can be obtained by contacting the VA. Potential borrowers can go online to https://vip.vba.va.gov/ to apply for the program and obtain their COE.
For more information, or to apply for a VA loan, click here.