Now is the time to take advantage of the VA cash out refinance program if you are a qualifying Veterans and Military Personnel. You may have access to thousands of dollars and not even realize it. Here are five reasons you may want to look into this refinance option sooner rather than later.
1. The VA cash out refinance program allows you to refinance up to 100% of the current value of your home.
The property appraisal will determine the current value of your home. Wisconsin property values continue to rise, according to Zillow, and a higher value equals a larger cash out.
For example: Say you purchased your home in 2012 for $200,000 and you owe $170,000 on your current VA mortgage. If your home appraisal comes back valued at $240,000, you could gain access to $70,000. You are not required to cash out the entire amount with a Wisconsin VA cash out refinance, but the maximum allowed is 100% of appraised value.
2. It’s your equity in your home, you’re free to use the money for whatever you want.
There are no restrictions as with other debt consolidation or home improvement loans. This is the money you have put into your home, it’s yours to use the way you want. You could use it to pay off credit cards, pay off your car, remodel the kitchen, put on a new roof, tuition, wedding expenses, vacation, use for retirement or find another use for the cash.
3. A VA cash out refinance is different than a home equity (HELOC) or second mortgage and takes advantage of the current, stable mortgage interest rates.
A home equity or second mortgage will have a variable interest rates rather than a fixed rate. However, the VA cash out refinance is a fixed rate mortgage. Mortgage interest rates continue to be historically low. However, experts such as Home Buying Institute (HBI), have indicated an expected increase in rates. This means there’s no better time to take advantage of the Wisconsin VA cash out refinance program.
4. As with any other VA guaranteed mortgage, there is no mortgage insurance.
Unlike most mortgage programs which require mortgage insurance (MI) if you borrow more than 80% of your home’s value, the VA does not ever require MI. Even though all VA mortgages are provided through private lenders, the loans are guaranteed by the US Department of Veterans Affairs.
In other words, lenders are willing to fund VA home loans because the government insures the repayment of the loan even if the mortgagee goes into default. The absence of MI can add up to quite a large monthly savings when compared to other types of mortgages.
5. You can roll the closing costs and funding fees into the VA cash out refinance.
Pay for the closing cost/funding fees through the loan rather than tapping into savings to bring cash at the time of closing.
For example: If you have $70,000 available from the equity in your home and closing costs/funding fees are $4,000, you would be able to receive a total of $66,000 at the time of closing. The $4,000 due at closing would be added into the mortgage and paid back over the term of the loan.
The VA cash out refinance program is only one of the home loan advantages offered to qualified veterans and service members. You may want to look into the option of switching an adjustable rate VA mortgage into a fixed rate mortgage. Switch a 30-year fixed rate into a 15-year fixed rate to reducing the term on your current mortgage. Another popular refinance programs is the VA Interest Rate Reduction Refinance Loan (IRRRL). This VA streamline refinance has very little documentation requirements, which makes it a quick and simple process. You don’t need to provide tax or income documentations and there is no appraisal required. You must currently have a VA home loan in order to take advantage of the IRRRL program.
Civilian or non-qualifying veteran or service member? There are other cash out refinance programs which may allow you to cash out a portion of your home equity too.
An experienced mortgage advisor will be able to evaluate your personal situation and determine what option is right for you. The mortgage experts at Stampfli Mortgage track down the best rates and simplify the entire process for you. But don’t take our word for it, just take a look at what our customers have to say. Call 608-572-7222 for a free mortgage analysis today. Or fill out a short application form to have one of our knowledgeable mortgage advisors contact you with options.