VA mortgage loans are an excellent benefit available to military veterans. Everyday, brave U.S. citizens take extreme risks to ensure that our country is kept safe and that our sacred liberties are kept intact. VA loans are one way in which we give back to these brave citizens. VA loans are among the last type of mortgage loan which can be obtained with zero money down. This is one of the main advantages to VA loans. This advantage may be particularly helpful in very competitive markets, such as Seattle, Bellevue and others markets here in Washington State. Occasionally, depending on the situation, VA loan holders may consider refinancing their Washington State home. Refinancing a Washington State VA mortgage loan can carry a number of significant perks.
In this post, we will identify and discuss 5 perks of VA mortgage refinance in WA State. As we will see, these irresistible perks can make refinancing a particularly attractive option. We will discuss how a refinance can lower your monthly payments, we will go over the low credit requirements for a refinance, the appraisal and employment documentation requirements, the advantages of cash-out refinances, and the advantages of converting into a different type of loan.
To recap, we will go over the following perks:
- Streamline refinance can lower your monthly payments
- Good credit isn’t necessary for most refinances
- No appraisal or employment documentation required in most cases
- Cash-out refinance can fund other things
- Converting to a conventional loan offers benefits
Perk #1: An IRRRL Can Lower Your Monthly Payments
VA mortgage refinances can take multiple forms. The most common form of VA mortgage refinancing is the “streamline” refinance, also referred to as an “interest rate reduction refinance loan,” or IRRRL. With a VA IRRRL, one VA loan is refinanced into another VA loan at a lower rate or a lower monthly payment (or both). With an IRRRL, you can also convert your fixed-rate VA loan into an ARM VA loan. With a lower monthly payment, you can end up saving a significant quantity of money over the course of your loan term. Aside from better terms or lower monthly payments, another benefit of the IRRRL is that no cash is required at closing. Closing costs of an IRRRL can be rolled together with the loan itself.
Perk #2: Good Credit Isn’t Necessary for Most Refinances
Another big perk of a VA mortgage refinance in WA State is the fact that good credit isn’t necessary for most IRRRLs. This is because VA refinances aren’t typically sent for underwriting. This means that, in most cases, you’ll be able to receive the financial benefits of a refinance even if your credit situation is less-than-ideal. The exception to this is when your loan payments will increase by more than 20 percent or when you’re 30 days or more behind on payments for your current VA loan. In those cases, your VA refinance may be subject to tighter credit requirements.
Perk #3: No Appraisal or Employment Documentation Required in Most Cases
Along with credit, another big perk is that no appraisal of your home is required for most VA loan refinances. Not only does this make things procedurally simpler, it also increases the overall accessibility of VA loan refinances. If your home loses value, then this reduction in value would be picked up by an appraisal, and this could mean that you’d suddenly lose the ability to conduct a refinance on a traditional loan. This is why IRRRLs are commonly referred to as “streamline” refinances because they are procedurally so quick and easy. Most VA mortgage refinances also do not require documentation to substantiate either your income or employment status. This means that you’ll be able to qualify for a refinance even if you happen to be between jobs when you initiate the process. This is undoubtedly a big perk.
Perk #4: Cash-Out Refinance Can Fund Other Things
Another perk of a VA mortgage refinance in WA State is access to cash for the purpose of paying off debt or funding other things. If you decide not to initiate an IRRRL, you can initiate a cash-out VA mortgage refinance instead. This type of refinance option allows you to extract cash based on the equity in your home. If you have other debts or need to fund outside projects, a cash-out VA refinance can be an extremely useful thing. However, you need to be aware that you will be subject to tighter credit requirements if you decide to initiate this type of refinance.
Perk #5: Converting to a Conventional Loan Offers Benefits
If you refinance your VA loan, you will have the option to convert the VA loan into another type of loan. For instance, you can convert your VA mortgage loan into a conventional mortgage loan. Doing so will give you several benefits. One of the main benefits is that converting to a conventional loan will free up your entitlement to another VA loan. The VA loan has an “owner occupy” requirement, which means that you must live in the home to qualify. This means that you cannot use a VA loan to finance a rental property or other investment property. If you convert your VA mortgage loan to a conventional loan via refinance, this will enable you to procure a new VA loan if you have a desire to purchase a second property.
As you can see, the perks of VA mortgage refinance in WA State can be quite significant. A VA mortgage refinance, in most cases, is relatively easy to obtain and has the potential to substantially improve your financial situation. A refinance can also give you cash to pay off debts or fund other projects. Depending on the specifics of your situation, you may want to give mortgage refinance serious consideration.
Before you attempt to refinance, however, you should consult with an experienced mortgage professional. If you’d like additional information, reach out to one of the professionals at Sammamish Mortgage. Sammamish Mortgage can provide information on VA mortgage refinance, other mortgage products, the home buying process, and other related topics. If you’d like to get in touch with us, Contact Us by visiting our website. You can view live mortgage rates, get an instant rate quote, or even Apply Now if you’re interested in applying for a new loan. We look forward to hearing from you!