Just like a conventional home loan, your VA home loan can be refinanced; in fact, you can even refinance a conventional mortgage into a VA loan, if you are an eligible veteran. Whether you need cash for unexpected expenses or you want to save money with a lower interest rate, you have options.

Lower Your Interest Rate With a VA Streamline Refinance Loan

Also called an Interest Rate Reduction Refinance Loan (IRRRL), the streamline refinance loan allows current VA loan holders to reduce their interest rates without all the documentation involved in a new full documentation loan. This is because the streamline refinance loan is available only for refinancing an original VA mortgage.

In order to take advantage of the VA streamline refinance, you must be a veteran with an original VA loan who used original eligibility to obtain that loan. For the refinance, any co-borrowers on the original loan must be included on the new loan. As long as all borrowers remain the same, the credit check and income verification performed for the original loan remain valid and do not have to be repeated.

Removing a borrower changes the terms of the loan and requires a new full documentation loan. You may, however, add a new spouse to a VA streamline refinance, as long as all other borrowers remain the same. The new spouse will need to pass the credit and income verifications.

Because you are not substantially changing the terms of the original VA loan, a streamline refinance does not require:

  • An appraisal; you are only refinancing the amount remaining on the original loan
  • Out of pocket costs; you my add closing costs onto the loan total
  • Income or credit verification, unless you are adding a new spouse, who must pass these checks

You may also add up to $6,000 in home improvements to the loan total, and the property does not need to be your primary residence.

With a streamline refinance, the VA requires that your new interest rate be lower than the original, unless the refinance is replacing an adjustable rate mortgage. In addition, the VA charges only a 0.5% funding fee.

Get Cash With a VA Cashout Refinance Loan

Both current VA loan holders and eligible veterans with conventional loans can refinance with a VA cashout refinance loan up to 100% of the home’s appraised value. This option provides veterans with access to cash to meet unexpected expenses or for any other use the lender deems acceptable.

As with the VA streamline refinance, you can add up to $6,000 in home improvement costs as well as the closing costs onto the loan.

Unlike the streamline refinance, the VA cashout refinance loan must be used to refinance your primary residence, and the home must be appraised. This loan also requires a credit check and income verification.

Which type of VA refinance loan is right for you will depend on what type of loan you have currently as well as what you hope to accomplish with the refinance.