A VA refinance has many benefits to offer veterans. The federal government’s guarantee of your loan is a major factor in making sure that your home loan is approved. For a veteran to qualify for a VA refinance, he or she must be in an eligible category. Eligibility depends on several factors, but at its core, the VA is interested in providing home loans to veterans who have served the country in some way and that meet several other criteria. Let’s take a look at some other important VA mortgage uses and benefits.
One of the main reasons that homeowners use VA cash-out refinance loans is to get cash for home repairs or upgrades. Just like with any loan, there are qualifications to meet and if you make too many mistakes along the way your eligibility may be eliminated. However, since the VA’s guaranteed insurance policy essentially puts a financial security shield on the VA borrower, lenders can pass on many more beneficial loan terms to you, the veteran, than if you have previously financed a house purchase using a VA loan.
For example, you will often find that VA lenders charge less for down payments and closing costs than what you would expect from a conventional mortgage. You can expect better interest rates as well.
Another major reason that VA refinances borrowers are attracted to this type of refinancing is that they can save a great deal of money. If you currently have an adjustable-rate mortgage or an interest-only loan, then you may be paying more than you need to each month. If your monthly payment is higher than your income, then there is a good chance that you could qualify for and obtain a VA loan refinance. To get started, all you need to do is contact your lender and see what sort of refinancing options are available to you. You can also go online and visit the website of the Veterans Association to learn more about the advantages of a VA refinance plan.
In addition to getting the benefits of reduced interest rates and better mortgage rates, a VA refinance plan can give you peace of mind. There is a great deal of risk involved with buying a house at the current interest rates. Many people mistakenly believe that a 30-year fixed-rate mortgage is a sound financial decision, but you would be wrong. There are always times when interest rates fall below normal rates, which means that you could be stuck owing more money in a much longer period than you planned. This is one of the reasons that it is better to go for a refinance plan.
The other advantage of a VA refinance plan is that you will receive cash for most, if not all, of the money that you repay on the loan. This cash can be used for a variety of uses such as making home improvements or paying down other debts. Once you receive your cash, you can use it exactly how you want to.
The third advantage of this type of refinancing is that you will be able to pay your mortgage off faster. With a variable-rate mortgage, your payments may fluctuate up and down over time. As a result, it can take years to pay down the principal on a VA loan-which is significantly faster. Homeowners who refinance their homes with the assistance of VA loans will save a significant amount of money in both the short and long terms.
