VA refinance

VA Loan Refinance Options: A Reader Question

May 9, 2014

VA Loan Refinance Options: A Reader Question

052-logoA reader asks, “Hello…we received a letter a few days ago from a VA Refinancing bank in California. We had purchased our home last July and have recently been very worried about all our medical bills, etc. that have accumulated since my wife is on total disability and has have many health issues which my employer’s insurance nor Medicare has been to willing to pay. Other bills are also starting to creep up on our budget.”

“We haven’t missed a mortgage payment, but it is getting more difficult every month…We looked into a VA Loan and were accepted and purchased our Ranch/3 bedroom last July for $154,000. The home is appraised at $206,000.”

“So our question for you is that is it feasible at this point to refinance or is there even such a VA program for this or should we just consider looking into a 2nd mortgage and help us pay off those bills?”

Existing VA mortgages can be refinanced with a VA Streamline Refinancing loan which has no VA-required credit check or appraisal.

The goal for most VA Streamline Refinance loans is to lower monthly mortgage payments, interest rates, or provide some other benefit to the borrower such as refinancing from an adjustable rate mortgage to a fixed rate loan.

There is no cash back to the borrower with VA Streamline Refinancing, but borrowers who do want cash back should consider applying for VA cash-out refinancing. This type of refinancing loan does require a credit check and a new appraisal, but permits money back to the borrower after the original loan has been paid in full.

VA Streamline Refinancing loans require no occupancy when the new loan is signed, but VA Cash-Out Refinancing does have an occupancy requirement the borrower will be required to meet in order to qualify for the mortgage loan.

Do you have questions about VA home loans? Ask us in the comments section.

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