VA CASH-OUT REFINANCE

Similar to any other mortgage, the VA’s Cash-Out refinance loan allows homeowners to take cash out of their home to take care of concerns like paying off debt, buying a car, paying for school, or making home improvements. A Cash-Out refinance loan can be used to refinance either an existing VA loan or a Non-VA loan into a new VA loan. The VA will guarantee the loan up to 100% of the value of your home; as determined by a new VA appraisal. This is dramatically different than other loans that limit cash out at 80% or 85% of the value of your home.

Qualifying for a VA Cash-Out loan is very similar to getting a VA purchase loan. Unlike the “VA streamline refinance”, a cash out loan requires credit, income, and an appraisal to be evaluated by a VA underwriter.

There must be an existing lien on the property to obtain a VA Cash-Out refinance. That means you may not be able to obtain this loan if you currently own your home free and clear. In this instance, you would need to discuss options with a First Federal loan specialist at 1-877-455-4677 to ensure we are able to put you in the correct loan.

The VA loan guaranty program does not impose a maximum loan limit. The VA does limit the maximum VA guarantee to $510,400.00 for most counties in 2020 unless you live in a “high cost area” (contact us for details or questions). VA loans in excess of the county loan limit are available. However, the lender may require the veteran to make a down payment in an amount equal to 25% of the difference between the loan amount and the county loan limit. You should ask your VA loan specialist if your loan amount exceeds $510,400, and they can easily assist you with your specific situation/question.

For example, consider a situation where you apply for a cash out VA home loan and the appraised value is $300,000. The maximum loan amount is 100 percent of $300,000, or $300,000. If the existing VA mortgage balance is $200,000 and closing costs are $5,000, the cash to the borrower is $300,000 – $205,000 = $95,000.

Please call one of First Federal Bank’s VA loan specialists at 1-877-455-4677 or simply click the “apply now” button below and one of our VA Loan specialists will call you and review your options.