You need to have a good idea of when to refinance a VA loan and get a good mortgage broker Nashville. In this article, we’ll take a look at when to know the right time to refinance a VA loan.
Refinancing typically refers to the means of renewing or revisiting the terms and agreements of an old mortgage and exchanging or substituting it for a new mortgage loan. The process of refinancing can be carried out with the help of a mortgage broker Nashville.
Before we go into the question of the day, we would have to establish the meaning of certain terms to aid better understanding. Let’s get started by looking at some of the important terms below.
VA Loans- What And Who Is It For?
A VA loan, also known as Veteran Affairs, is a type of mortgage loan guaranteed by the United States Department of Veterans Affairs.
VA loans are issued and made available for qualified veterans, active military service personnel, and their existing spouses.
VA loans are issued by government-certified private lenders and not by the VA itself. In essence, the need to get a good and qualified mortgage broker Nashville is important.
Benefits Of A VA Loan
The benefits include;
- There are zero to no down payments required.
- There is no PMI requirement needed.
- There’s access to low-interest rates and better terms.
- There are no penalties required for late loan payments.
- Fewer and limited closing costs.
Refinance A VA Loan
Now when dealing with the aspect of refinancing a VA Loan, you have two major options. A mortgage broker Nashville can also bring these options to your attention. They include;
Interest Rate Reduction Refinance Loan/ VA Streamline
IRRRL loans often known as Interest Rate Reduction Refinance Loan or VA streamline are a refinance loan option for home/property owners with an already subsisting VA loan and have plans of replacing the old loan with a new one.
This type of loan creates a benefit of low-interest rates for individuals who plan to refinance than the actual amount needed to acquire a VA loan.
IRRRL does not require an appraisal and little or no documentation of your income which can be very beneficial to an individual with a low income. Also bear in mind that you might need to go through a mortgage broker Nashville to help make the process easier.
VA Cash-Out Refinance
The VA Cash-Out refinance is a loan that allows a homeowner to replace his or her subsisting mortgage loan and withdraw his acquired equity in cash.
Although, unlike the IRRRL, a cash-out loan is documented and this loan can be used to refinance a conventional loan. Also note that this type of loan can request for COE ( Certificate Of Eligibility) and some military requirements like the completion of at least 90 days of active service, etc.
The Right Time To Refinance A VA Loan
Put the following into consideration;
- Your need for cash: Because you have the option of a cash-out refinance, thus, getting your home’s value/ equity in exchange for cash, you might just opt for refinancing your VA loan. That way, you get more cash for your next property or project.
- How long you plan on retaining your property: Once you’re certain that your stay tends to be longer-term, you can consider refinancing your VA loan and tapping from the benefits it provides.
You should bear in mind that refinancing your VA loan requires a waiting period of at least 7 months to achieve a complete 6 monthly payment.
Asides from the options listed above, you should also consider your creditworthiness, current rate, and even your budget before deciding to refinance.
Or, you can go for a safer option by working with a mortgage broker Nashville. We recommend working with HomeRate Mortgage. HomeRate Mortgage is also operated by veterans and offers the best VA loan experience.
HomeRate Mortgage offers Purchase VA loans, VA streamline refinance loans, as well as cash-out, refinance a VA loan while giving low rates, fast closing times, and quick quotes.