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VA Home Loan Refinance Types, Qualifications and Information

VA Refinance Home Loan Information

What is an IRRRL Refinance?
Click here to learn about the IRRRL (Interest Rate Reduction Refinance Loan).

What is a Cash Out VA Refinance Home Loan?
Click here to learn about the Cash Out Refinance VA Home Loan.

Who is Eligible for a VA Home Loan Refinance?
Click here to learn about eligibility for a VA Home Loan Refinance.

What are the qualifications required to apply for a VA refinance?
Click here to learn about qualifications for a VA Home Loan Refinance.

What is a NEW VA Refinance Home Loan (all purpose refinance)?
Click here to learn about the all purpose refinance.

How Do I apply for a VA Home Loan Refinance?
Click here to Apply for a VA Home Loan Refinance.

Veterans who possess an adjustable rate mortgage (ARM) and owe more than they can afford have options. A VA Refinance Loan can enable qualified homeowners the ability to capitalize on lower rates or to get cash out that you can use in a variety of ways. While getting a more affordable payment is a great reason to refinance, it is hardly the only reason. When the prevailing rate is much lower than your current mortgage rate, it usually makes sense to refinance.

Another solid reason to refinance is to turn an adjustable-rate mortgage into a fixed-rate loan. You can also use a refinance to cash out some of your home equity in order to consolidate debt, pay down other loans, or consolidate two mortgages. Certain homeowners, who are wary of future rate jumps, combine their mortgage with a home equity line of credit. Furthermore, in a divorce, a re-fi is often necessary to remove the separated spouse from the note. In terms of the VA home loan, the two prominent refinance programs open to applicants are the Interest Rate Reduction Refinance Loan (IRRRL) and the VA Cash-Out Refinance.

What is an IRRRL?

An IRRRL (Interest Rate Reduction Refinance Loan) is a VA loan that lets you refinance an existing VA loan to a new one with a lower interest rate. Sometimes referred to as a streamline refinance, the IRRRL loans are “rate and term” loans. Rate and term loans are not for cashing out equity – all they do is change the rate and term of your loan. In addition, IRRRLs can only be done on existing VA loans. If you do not have a VA loan or if you currently have a VA loan and would like to cash out equity, you have to apply for a NEW VA refinance.

The IRRRL lets you to borrow up to 100% of your current loan amount, plus a 0.5% IRRRL Funding Fee (unless exempt). Because the property owner is refinancing from one VA loan to another, the IRRRL process is streamlined and relatively simple. The IRRRL provides numerous benefits for people looking to refinance their VA loans. For example, because fees and closing costs can be added into the new loan, you can refinance while limiting your out-of-pocket expenses. Additionally, in most cases, you do not have to get a new appraisal and you do not need a new Certificate of Eligibility. Furthermore, the refinance does not make any further change to your entitlement.

IRRRL Requirements

The primary requirement of this type of refinance is that the borrower cannot receive any cash back. Additionally, the applicant must certify that they currently or previously occupied the property as a primary residence. Finally, in order to qualify, the loan holder has to be up to date on their mortgage. That means having no more than one 30 day late payment inside of the previous twelve months.

To apply for an IRRRL, fill out the VA Loan Application.

If you currently have an adjustable rate mortgage and owe more than you can afford call : 888-573-4496. We can help you to apply for a free VA loan modification or to apply for an IRRRL.

What is a Cash Out  VA Refinance Home Loan?

The Cash-Out Refinance Loan allows eligible veterans the ability to lower the rate of their conventional or VA loan while simultaneously taking cash out of the home’s equity. This is not the same as a home equity loan, which functions as an additional loan. Rather, as with any refinance, on a cash-out you are creating a new loan. That is to say, the VA-Cash-Out refinance loan becomes your new mortgage.

This type of refinance loan is available to a veteran loan holder regardless of what kind of loan they possess. Whether you have an FHA, USDA, VA or conventional mortgage, you can still be eligible.

If eligible, you can refinance up to the full value of your home’s mortgage debt, but only under certain circumstances. In other situations, homeowners can refinance to a lower rate and use the cash discretionarily. This is a great option for loan holders looking to cash in on their equity now to pay off debt, finance home improvements, or to navigate through an unforeseen financial emergency.

As with the IRRRL, the funding fee and closing costs can be absorbed into the entirety of the loan amount. Cash-out refinance loans are subject to the standard underwriting guidelines established by The Department of Veterans Affairs.

Both types of VA refinance loans are available to:

  • Veterans and former military
  • Discharged service members
  • Active duty military
  • Most reservists (call for details)
  • Some surviving spouses (call for details)

Neither credit nor appraisals are always required for a VA refinance. Each VA home loan is funded by entities that may or may not have overlay restrictions. These restrictions vary by loan investor.

What is required to apply for a VA refinance?

    • Military service or eligibility for a VA guarantee.
    • Property must be owned by an eligible veteran, service member, spouse of the same or another qualified person.
    • All others liens and loans must agree to subordinate.
    • No late payments (within the past 12 months) on any consumer debt.

What is a NEW VA Refinance Home Loan (all purpose refinance)?

If you do not have a VA loan, a New VA refinance loan can be used to:

  • Lower your Interest Rate
  • Lower your payment
  • Obtain a cash-out
  • Consolidate your debt

Both types of VA refinance loans are government mortgage products. This means that they are guaranteed by the United States Department of Veterans Affairs. With the exception of an IRRRL, VA refinances allow you to borrow up to a maximum of 90% of a residential property’s value. However, for an IRRRL, you usually don’t need a new appraisal or income documentation. The maximum VA refinance loan is 90% of the home’s value, plus the maximum VA Refinance Funding Fee of 3.6% (unless exempt).

To apply for a VA refinance, fill out the VA Home Loan Application. Closing costs can be paid for with a lender credit, or included in the loan amount making the refinance $0 out of pocket.


To Learn More or Apply for a VA Home Loan Refinance:

To inquire which lender is right for you, call 888-554-6846.

To apply by phone, call 888-573-4496. The applications desk is available 24 hours a day.

To Apply Online, click here to begin the VA Home Loan Application.