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The VA home loan program is best known for enabling veterans buy a home without a down payment (100% financing), but there are reasons why you should consider it for refinancing, as well.
Here’s a quick recap of the virtues of the VA Home Loan:
Is a VA loan your best choice for refinancing your conventional loan? To answer that question, you should have some idea of what your home is worth. If your goal is simply to improve the rate of your existing loan without withdrawing any cash, you should determine whether the new loan will be more or less than 80% of your home’s appraised value.
If it will be above 80%, then a VA loan is definitely your best bet; you won’t have to pay for mortgage insurance, which could run several hundred dollars a month.
If you plan to take some cash out of your home, the VA loan wins again. The rate for a “cash-out” conventional loan is nearly .25% higher than for a loan where the borrower takes no cash out. The VA loan has no such adjustment. Additionally, a veteran homeowner will be able to get a loan for the full value of the home—with no adjustment to the interest rate.
You should also have some idea how long you plan to stay in your home. If your goal is simply to reduce your interest rate rather than taking cash out of your equity, you should consider how long it will take to recover the closing costs. This is easier than you might think. Here are the steps to take:
The VA Home Loan Program has helped millions of veterans become homeowners by doing away with the down payment requirement. Even if you have never used your VA entitlement and have a conventional loan, the VA loan can still be a clear winner for you in your refinance.
Some factors in getting a refinance apply to all types of loans, whether or not you choose to use a VA loan. To learn more about the refinance process, click the button below and download our informative ebook.
Do you have questions about home loans? Are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest. Contact us today with any questions you have about mortgages.
Are you considering making a home purchase in Spokane at some point in the near future? Then you’ll want to get in touch with a mortgage broker to help you start the process. Read on to find out more and to check out our loan limits tool.
In the overwhelming majority of the 50 largest cities across the U.S., monthly rent is more than the mortgage payment for single-family homes. In several cases, much more.