VA mortgages stand out as one of the biggest benefits to men and women serving in the military. Although private lenders make the loan, the Department of Veterans Affairs guarantees all VA mortgages, which is why these loans come with favorable terms and benefits not found with other mortgage types.
The Benefits Of Refinancing To A VA Mortgage
A VA loan may very well be the borrower’s only option for putting no money down, as many lenders will cover 100% of the value of the home, thanks to the backing of Veterans Affairs. There is a ceiling on the amount covered depending on the area of the country, so contacting a qualified VA mortgage professional is the preferred way to discover limits locally.
VA loans also require no mortgage insurance, cover many of the costs associated with closing or refinancing and, in many cases, have lower mortgage rates than comparable loans.
Veterans who had never considered a VA mortgage may wish to take advantage of the flexible terms and the favorable market to refinance their current mortgage into one that offers tremendous benefits.
Qualifying For a VA Mortgage
Veterans Affairs mortgages are limited to service men and women and their spouses, a benefit for serving their country. After a set amount of service time veterans are able to apply for a certificate of eligibility that will allow them to apply for the loan.
Those who are eligible include most military members in active duty, members of the National Guard, veterans both discharged and retired, military academy cadets as well as any spouse of a deceased serviceperson.
Eligible Homeowners Can Refinance Through Cash-Out Refinancing
The Department of Veterans Affairs considers a conventional mortgage to VA mortgage refinancing to be the same as cash-out refinancing and treats it accordingly.
This process is as intensive as an initial mortgage because it will replace the current mortgage altogether, so all applicants are expected to go through the standard credit and underwriting process.
VA loans are incredibly beneficial to current military members as well as retired veterans who may have never considered taking advantage of the program. Although the mortgage can cover 100% of the value of a home, the actual amount varies depending on the area. The only way to know for sure how much will be covered and whether it’s the right time to refinance is to contact a mortgage professional who has experience with VA mortgages.
If you are like many other homeowners, your home mortgage payment is the single largest expense in your monthly budget. This is a fixed expense that you will typically be responsible for until your loan is paid in full or until you sell your home, and you may have a 15, 20 or even 30 year term on your mortgage.
