A VA Cash Out refinance is a great option to pay off any type of loan on a property, get cash out, and possibly even obtain a lower rate. You may be able to refinance up to 100% of your property’s current value.
Here are some common questions and answers about the VA Cash Out program.
Do I have to live in the property? Yes, the VA cash out loan program requires that you currently occupy the property and cannot be used as a rental.
Can I pay off a second mortgage on my property with a VA cash out loan? Yes, as long as you meet existing loan-to-value requirements, you can pay off an existing second mortgage or equity loan, or any other lien on the property.
My VA lender is only allowing me to take out 80 percent of the value of the property. Why? It may be the lender has an internal guideline, called a lender “overlay,” your debt to income ratio is limiting your amount or there may be a state statute. Texas for instance limits all cash out loans to 80 percent of the value of the home, regardless of the loan type.
Are there ways to adjust my closing costs? Rolling in closing costs on a VA cash out loan reduces the amount of cash proceeds to you at the closing table. Ask your lender about adjusting your interest rate that can provide a credit to part or all of your required loan fees.
Is the cash out loan available for a duplex? As long as you live in one of the units, yes.
I like my current rate, can I keep my current loan and get a VA cash out refinance? A refinance of any type replaces an existing loan, so keeping your current mortgage is not an option. If you only want cash, consider applying for a home equity loan instead. A home equity loan offers low rates with few closing fees.
If we’ve answered your questions, or if you have more questions you need answered, contact one of our VA experts. They will guide you through the process and answer all your questions.