If you bought your home with a VA loan a few years back, you are not locked into that rate for the life of the loan, and a lot of Veterans do not realize how simple it can be to lower what they pay each month. The real question is not whether you can refinance your VA loan, it is which path makes sense for what you are trying to do right now, and at PBT Bancorp we walk through that decision with Veterans and active-duty service members every single day.
Should I refinance my VA loan right now
The honest answer depends on your goal, and there are really only two reasons most homeowners refinance. The first is to lower your interest rate and your monthly payment, and the second is to pull cash out of the equity you have built up. If rates have dropped since you closed, or if you are carrying high-interest debt you would like to roll into your mortgage, it is worth a quick conversation. We would rather tell you to wait than push you into a refinance that does not actually save you money, so the first thing we do is look at where your current rate sits against what we can offer you today.
Lowering your rate with a VA IRRRL
If you just want a lower payment and you already have a VA loan, the VA IRRRL (sometimes known as a VA streamline refinance) is usually the easiest path. There is no appraisal, no income verification, and no asset verification, which is what makes it so much faster than the loan you closed originally. We even have a No Score program on the IRRRL that does not require a credit score at all, the only requirement is that you have been no more than 1x 30 days late in the past 12 months. As a quick example, refinancing a $300,000 VA loan from 6.5% to 6.0% saves around $100 a month, and over a few years that adds up to real money your family can put to better use.
Pulling cash out of your equity
If your goal is to access the equity in your home rather than just lower your rate, a VA cash-out refinance is the way to do it. This one works a little differently because it does require a full appraisal and a look at your credit and income, but our credit requirements are flexible and we have lenders who accept credit scores down to 500. Veterans use a cash-out refinance to consolidate debt, handle home repairs, or cover a major expense, and there is still no monthly mortgage insurance the way there would be on a conventional loan. If you are weighing the two options and you are not sure which fits, that is exactly the kind of thing your loan officer will help you sort out.
How to get started
Getting started is simpler than most people expect, and you do not need much to begin. We typically only need your current mortgage statement, a copy of your driver’s license, and your homeowners insurance to get you qualified upfront, often in about 15 minutes. From there we pull your Certificate of Eligibility (COE), send out your initial disclosures, and move you through the process as fast as we can. Because we are an FDIC member bank and a wholesale broker with access to over 35 wholesale lenders, we are able to shop your loan and close in 2 to 3 weeks, while many of the larger lenders take 30 days or longer.
Why so many Veterans refinance with us
Our team has decades of experience working with Veterans and has helped over 3,000 families find their home or refinance and save money. What many homeowners do not realize is that the larger the lender, the higher the closing costs tend to be, so by switching to a lender who can actually shop your loan you will often receive a better offer than you would by staying put. Between the No Score IRRRL and our flexible credit options, we can often close loans that most other lenders are not able to, and our goal is for this to be the easiest loan you have ever completed.
If you are thinking about refinancing and you are not sure where to start, the easiest next step is to let us run the numbers for you. Give us a call at 800-697-4371 or fill out our online pre-qualification form, and we can tell you pretty quickly whether a refinance makes sense for you. We offer every type of VA loan, so if a different program fits your situation better, we will steer you to it.
Answers for first-time refinancers
When is refinancing my VA loan worth it?
When the monthly savings outweigh the costs within a timeframe you will actually stay in the home. We figure your break-even month with you upfront, and if the math does not work we will tell you to wait, the same advice we give our own families.
Do I need an appraisal to refinance?
Not on an IRRRL, the streamline skips the appraisal completely. A cash-out refinance does require one because the new loan is sized against your home’s current value.
Why is my payoff higher than my loan balance?
Because mortgage interest is paid in arrears, the payoff is almost always a little higher than the balance on your statement, plus prepaid interest from the day the new loan funds through the end of that month. We walk through the exact payoff with you so nothing surprises you at closing.
Can I refinance if I have already refinanced before?
Yes, there is no limit on how many times you can refinance a VA loan, as long as the seasoning requirements are met and the new loan delivers a real benefit.
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What do you need help with?
Thank you for your interest. We will be in contact as soon as possible.
Prefer not to wait? Call 800-697-4371 or text us at (800) 697-4371.
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Ask Mike to look at your VA loan options.
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