Are you an active duty military serviceman or woman or a veteran who purchased your home with a VA loan and interested in reducing the amount you owe for monthly mortgage payments? You may be qualified to refinance your existing VA loan for a new mortgage with more favorable conditions and terms. If you are interested in learning more about how to refinance a VA loan in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage can help. Contact our loan specialists today for a consultation.
VA Loan Refinance Types: VA Streamline/IRRRL and VA Cash-Out Refinance
There are two commonly used VA loan refinance programs, VA streamline, also known as IRRRL, (Interest Rate Reduction Refinance Loan) and VA cash-out refinance. A VA streamline loan is intended to simplify the process of refinancing a VA loan and allows borrowers to refinance a current mortgage rate to a lower rate currently being paid. With a VA streamline streamline refinance, certain documentation requirements can be waived, making the refinancing process occur more quickly. A VA cash-out refinance allows a borrower to turn their home’s equity into cash. This type of loan lets a borrower refinance their loan to a lower payment and keep the cash difference. You can also use a VA cash-out to lengthen the time needed to pay off the loan.
Preparing to Refinance Your VA Loan
If you want to refinance your VA loan, there are several steps you can take in order to prepare for the process.
- First, determine the reason you want to refinance your home; is it to convert the terms of your loan or to lower your payments and rate?
- Decide which refinance program you want to use, (VA streamline, IRRRL, etc.). There are also programs available to alter loans from an adjustable rate to a fixed rate.
- Prepare the paperwork you will need and submit the necessary documentation
- Make arrangements to close the loan and sign the documents. Make sure to plan for any additional fees you may be required to pay when planning for closing costs
Eligibility Requirements for a VA Refinance
Typical requirements for refinancing a VA loan include:
- You must meet the military service requirements, and be an active duty service member, a veteran with an honorable discharge, or the spouse of a current servicemember or veteran
- A debt-to-income ratio, (DTI) of 41% or lower is desired
- A decent credit score of 620 or higher is preferred
Get Assistance Refinancing Your VA Loan
If you are ready to refinance your VA loan and receive a cash payment or a better loan rate, contact Foundation Mortgage. We serve borrowers in the areas of Knoxville, Maryville, Lenoir City, Oak Ridge, and Gatlinburg, Tennessee, and can work with you to determine the best refinancing option for your lifestyle.