VA Refi: Best VA Refinance Mortgage Rates
VA Refi
Hello, my name is Chip Peters and like you, I also
have been looking for the best deal on a VA refi.
There are an overwhelming choice of mortgage
refinancing options,
and it can be difficult to find the right one. So
this website contains the best information that I
been able to find on the net to help you find a
great VA refi.
Take Care,
Chip
For a VA refi, there are a number of options available to veterans for refinancing their homes. Refinancing can help you to lower payments, consolidate your debts, make improvements on your home, or even help you pay it off more quickly. Whatever your reasons, there are VA refi choices that will fit your needs. These choices include:
VA
Streamline Refi Loan: this is the
easiest and fastest way to reduce your interest rate,
reduce your payment, and/or reduce the length of your
loan. Also known as an interest rate reduction loan or
IRRRL, this is the best mortgage refinance loan on the
market – it is a wonderful benefit for any borrower that
currently has a VA mortgage. Credit qualifying is not
required, which means that even with bad credit, you may
still be eligible for a loan.
VA Debt Consolidation Loan: VA debt consolidation loan allows you to borrow as much as 100% of your home equity. It is great for homeowners who have accumulated some equity in their homes and are looking to consolidate all or part of their debts into one loan with lower interest and more affordable payments. Due to attractive interest rates and prolonged durations, it is probably one of the most money-saving debt consolidation products in the market today.
VA Refi Relief: The recent real estate crisis that left many households with decreased home values also caused many to get upside-down on their mortgages. VA refi relief, a lending product specifically developed to assist troubled homeowners, allows veterans to refinance their non-VA loans that have less attractive terms. Available to qualified veterans and active duty members, VA refi relief is an attractive solution to those who have no equity due to real estate market crash.
VA Home Improvement Loan: If you would like to make home improvements and increase the value of your home, you can use your home's current equity. You can borrow up to 90 percent of your home's equity in order to perform value-adding enhancements to your home, such as structural repairs, refurbishments and furnace replacements.
VA Energy Efficiency Mortgage: If you are making energy-efficient upgrades to your home, you can get up to $6,000 added to your Va refi loan. These loans allow you to qualify for a larger loan amount and purchase a better, more energy-efficient home. You would have to have your home rated before financing is approved.
VA Cash Out Refinance Loan: A VA cash out refinance loan is one to consider for veterans with excellent credit history who have some equity in their homes. While it is most commonly used for debt consolidation, the loan proceeds may be utilized for any purpose: making large purchases, building cash reserves, and so forth. This is a credit-based loan; therefore, a good credit history is a must-have. In addition, a home appraisal is a must-have in order to qualify. While VA cash out refi loan offers an attractive rate, a mandatory 3% origination fee is a high cost, although it can be included into the amount of your loan.
VA refi rates are dependent on the overall market. When bond prices soar and yields plummet, interest rates fall. These are typical signs of a recession. Mortgage rates are at an historic low - the lowest they've been since 1971. We have seen the worst housing market since the great depression according to real estate experts. Optimists say lower interest rates will jump-start the ailing market and help the economy on the road to recovery. The typical reaction when mortgage rates fall is a mad dash to refinance.
A VA borrower is not penalized for many things that may adversely affect a conventional borrower's rate. Many times sudden calls of duty can wreak havoc with family finances - fortunately the IRRL program does not penalize military service men or women when it comes to credit issues which are many times beyond their control. Credit scores, income, mortgage history, and many other factors can affect an individual's rate. If you're a VA borrower, your credit score can't go up if your credit score goes down. But, you can pay discount points to lower your rate. For borrowers looking for the best VA refi rates, it's the best of both worlds.
What's more, conventional and FHA borrowers will most likely need to have a sizable amount of money for a down payment. Most VA loans are true zero down loans.
For those seeking VA mortgages, however, waiting for a few tenths of a point lower rate might not be as important as the immediate zero down and 100% refinancing benefits associated with veterans' loans. Borrowers with equity in their homes can get cash out now to pay down debts, make home improvements or pay for other things they need.
At any rate, VA loans make sense to most who are eligible. Some of these benefits include:
• Zero down payment
• 100% financing on refinances and purchases
• No private mortgage insurance or prepayment penalty
• Conforming loan limits over $417,000 in some counties
• Streamline refinance capabilities
It's good to know that a VA loan can be refinanced under the VA's interest rate reduction refinance (IRRRL) or VA Streamline refi. With this program, borrowers with VA loans already can bypass much of the typical application and appraisal procedures and can go straight to refinance closing - often with closing costs rolled into the loan.
Those considering VA loans should act now at today's low VA refi rates. If interest rates drop even lower, a VA streamline refi will enable a VA borrower to get the lowest rate possible. There is no need for an appraisal in most cases and no re-qualifying requirements. Mortgage history is usually all that's needed with a VA streamline refi loan.
Va veterans are entitled to an Interest Rate Reduction Refinancing Loan (IRRRL). It is sometimes referred to as "Streamline" loan. Except when refinancing an existing VA guaranteed adjustable rate mortgage (ARM) to a fixed rate, it must result in a lower interest rate. When refinancing from an existing VA ARM loan to a fixed rate, the interest rate may increase. No appraisal or credit underwriting package is required by VA, but lenders may require an appraisal and credit report anyway.
A certificate of eligibility is not required. Va streamline refi lenders may use the VA e-mail confirmation procedure for interest rate reduction refinance in lieu of a certificate of eligibility. An IRRRL may be done with "no money out of pocket" by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs. (Remember: The interest rate on the new loan must be lower than the rate on the old loan unless an ARM is refinanced to a fixed rate mortgage).
Before even starting a Va refinance, there are certain issues you need to consider which may affect your decision to begin the process. First, you need to make sure you have a good reason to refinance. For example, refinancing to pay off or consolidate higher interest loans could be a good idea, but refinancing to take an expensive Hawaii vacation may be a mistake in the long-term!
Veterans are strongly urged to contact several Va refinancing lenders. There may be big differences in the terms offered by the various lenders. In addition some lenders claim that they are the only lender with authority to make IRRRLs, but any lender may make an IRRRL. Some lenders may say that VA requires certain closing costs to be charged and included in the loan. Remember - The only cost required by VA 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. As a veteran, you must not receive any cash from the loan proceeds.
A Va streamline refi IRRRL can be done only if you have already used your eligibility for a VA loan on the property you intend to refinance. It must be a VA to VA refinance, and it will reuse the entitlement you originally used. You may have used your entitlement by obtaining a VA loan when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the loan. If you have your Certificate of Eligibility, take it to the lender to show the prior use of your entitlement. The occupancy requirement for an IRRRL is different from other VA loans. When you originally got your VA loan, you certified that you occupied or intended to occupy the home. For an IRRRL you need only certify that you previously occupied it.
Some Va streamline refi lenders offer IRRRLs as an opportunity to reduce the term of your loan from 30 years to 15 years. While this can save you a lot of money in interest over the life of the loan, if the reduction in the interest rate is not at least one percent (two percent is better) and lots of new loan costs are rolled into the new loan, you may see a very large increase in your monthly payment. Beware: It could be a bigger increase than you can afford. No loan other than the existing VA loan may be paid from the proceeds of an IRRRL. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage.
Before even starting an Va refinance, there are certain issues you need to consider which may affect your decision to begin the process. First, you need to make sure you have a good reason to refinance. For example, refinancing to pay off or consolidate higher interest loans could be a good idea, but refinancing to take an expensive Hawaii vacation may be a mistake in the long-term! Common questions include:
1. How much will a Va refinance cost?
Most people don’t stop to actually work out how much Va mortgage refinance will cost them. They just see a lower interest rate than they’re currently paying and presume they will be saving money in the long run. However, the closing costs alone can take two to three years to amortize. There may be other costs involved as well, such as pre-payment penalties on your existing mortgage.
2.
What is the real annual cost?
Mortgages have more costs than just interest charges, including commissions and fees. The total cost of a mortgage is known as an effective annual percentage rate. You need to compare the effective APR of your current mortgage to other Va refinance offers because sometimes lenders appear to offer a better interest rate but the overall effective APR is either the same or even higher.
3. Do you have enough equity?
To qualify for a decent Va refinance offer you need a minimum 10% equity, but 20% is preferred. Without 10% equity, many lenders won’t even talk to you, but if you have 20% equity, you may qualify for better rates. Besides having sufficient equity in your property, you will also need a decent credit score, as a mediocre one will only get you higher rates. In this case refinancing could end up increasing your monthly payments rather than reducing them. Lenders will also verify your employment situation, your income and your assets. The recent subprime mess has made lenders much more cautious about lending, and they do more checking into your repayment ability than in the past.
4. Should you go back to 30 years?
When signing an Va refi contract you will probably find that you will be extending the mortgage to 30 years. If you have only been paying the old mortgage for one or two years, then this won’t be a problem. However, if you have been paying off the mortgage for 15 years prior to the refinance, you may find that the term of the mortgage has reset and been extended out to 30 years again. It may be better to choose a shorter term for the loan as you will build up equity faster and once your mortgage is paid off, your home can be your safety net in case anything happens. Once you are the outright owner of your house, you will be able to take out a credit line on your home if you need it.