VA Home Loan Refinance Options – Take Your Pick

Christine AndreskiVA home loans are the best mortgage deal on the market today! If you qualify, or even think you might qualify, it’s important you find out how the Texas VA home loans can benefit you and your family.

Did you know that VA home loans are not only for the first-time homebuyer, but for buyers looking to looking to refinance or are selling and looking for a new home loan? Last week I covered the eligibility requirements and the benefits of using a Texas VA home loan to purchase your residence. Let’s take a quick tour of those advantages and then look at a VA home refinance:

• Compared to a conventional loan, a VA home loan’s qualifying criteria is uncomplicated with more lenient credit and income standards.
• VA home loans are guaranteed and written at a lower interest rate.
• There is no down payment requirement and the need for mortgage insurance is eliminated.
• 100% financing is available.
• VA Home Loans often are the focus for first time homebuyers.
• The VA guaranty protects the lender against loss up to the amount guaranteed and allows a Veteran to obtain favorable financing terms.
• A Veteran’s basic entitlement is $36,000 but additional entitlement is available for certain loans over $144,000.
• VA does not have a maximum loan amount but lenders will generally only loan up to four times a veteran’s available entitlement without a down-payment, provided the veteran is income and credit-qualified and the property appraises for the asking price.
• The maximum entitlement amount changes on an annual basis and is currently $104,250 for 2009. Therefore, if a veteran qualifies, a loan up to $417,000 (larger loans are available with specific guidelines) can be obtained without a down payment.
• No prepayment penalty.

In addition to new home financing, the VA home loan program also has a impressive refinancing benefit. As with the new home loan program, the eligibility requirements remain the same. Veterans can lower their monthly payments with a VA refinance and with the all-time record low rates, this is the time to examine the benefits and advantages. Whether you currently have a VA home loan or a conventional loan, a VA refinance can save Veteran homeowners much needed cash every month.

There are three options to choose from should you qualify for a Texas VA home loan refinance.

• The first option is a VA Refinance. This is a traditional option that both lowers your interest rate and therefore lowers your monthly payment. If you’re eligible, you can enjoy the flexibility and benefits of VA loan products even if you don’t currently have a VA loan covering your existing property.

• The second option is the New Cash-Out Refinance Option. Due to recent legislation, there is a special opportunity for Veterans to refinance existing mortgages into VA Loans with excellent benefits. A Cash Out Refinances allows a homebuyer to free up cash with up to 100% of the current loan-to-value. The Veterans’ Benefits Improvement Act of 2008 makes is possible for strapped homeowners to use the cash out program to pay off debt, make home improvements, or simply have more cash on hand each month.

• The third option is the VA Streamline Refinance (for current VA borrowers) also referred to as an Interest Rate Reduction Refinancing Loan (IRRRL). The pros of this loan are:

• NO – Appraisal
• NO – Credit Check
• NO – Credit Underwriting
• NO – Qualifying Debt Ratios
• NO – Income Verification
• NO – Face to Face Application

You must already have used your eligibility for a VA loan on the refinancing property. In other words, it’s a VA-to-VA refinance reusing your entitlement. You must have your Certificate of Eligibility in order to show prior use of your entitlement.

Interested? You should be. And if you’re not, let’s see just how much can a refinance save… take a look at a 1% rate reduction:

How Much Will a 1% Rate Reduction Save You Monthly?

Loan Amount VA-to-VA Savings Conventional to VA Savings
$150,000 $115 $209
$250,000 $191 $347
$350,000 $268 $488
$450,000 $345 $627

And the only cost required by a VA refinance is a funding fee of one-half of one percent of the loan amount, which may be paid in cash or included in the loan.

Clearly, if you’re looking to refinance, it’s a smart move in today’s economy. To check your eligibility or for more detailed information regarding Texas VA Home Loans specific to your personal situation, Lone Star Financing VA home loan consultants are available at https://lonestarfinancing.com/Texas-VA-Home-Loans/. They will guide you step-by-step in maximizing your VA home loan benefits.

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