Great VA Loan Benefits

Refinancing with the VA Loan

VA Loan Refinancing:

Two options: You can either do an IRRL, which is an Interest Rate Reduction Loan- or- a Cashout Refinance Loan.

IRRL is when you currently have a VA Loan and want to refinance to a lower rate without getting cash back.

Cash – out refinance is when you want to refinance from a non-VA loan to a VA Loan or get some cash from current VA Loan.

VA Funding Fees for Refinance

-2.3% VA Funding Fee for first time users

-3.6% VA Funding Fee for subsequent users

Am I eligible for an IRRRL?

According to the Dept. of Veterans Affairs:

“You may be able to get an IRRRL if you meet all of the requirements listed below.

All of these must be true. You:

  • Already have a VA-backed home loan, and
  • Are using the IRRRL to refinance your existing VA-backed home loan, and
  • Can certify that you currently live in or used to live in the home covered by the loan

Note: If you have a second mortgage on the home, the holder must agree to make your new VA-backed loan the first mortgage.”

Why might I want to get an IRRRL?

According to Dept. of Veterans Affairs:

“Often called a “streamline” refinance, an IRRRL may help you to:

  • Lower your monthly mortgage payment by getting you a lower interest rate, or
  • Make your monthly payments more stable by moving from a loan with an adjustable or variable interest rate (an interest rate that changes over time) to one that’s fixed (the same interest rate over the life of the loan)

Cash-out Refinance

A VA-backed cash-out refinance loan lets you replace your current loan with a new one under different terms. If you want to take cash out of your home equity or refinance a non-VA loan into a VA-backed loan, a VA-backed cash-out refinance loan may be right for you.

Why might I want to get a VA-backed cash-out refinance loan according to Dept. of VA:

A VA-backed cash-out refinance loan may help you to:

  • Take cash out of your home equity to pay off debt, pay for school, make home improvements, or take care of other needs, or
  • Refinance a non-VA loan into a VA-backed loan

You’ll want to keep closing costs in mind when refinancing a loan, as they can add up to thousands of dollars and I can give you the details on that. Make sure you understand how your new loan amount relates to the value of your home.

San Francisco, San Mateo, Alameda, Santa Clara, Contra Costa, Marin, CountyVA ConformingLoan***VA JumboLoan***ConventionalConforming Loan *ConventionalJumbo Loan
Loan Limit$625,500$625,500+$417,000$417,000
Down Payment0%Based off purchase Price and county loan limit20%20%+
Interest RateBestBestBestHigher
Mortgage Insurance***Insured by Government$0/monthInsured by Government$0/monthTypically .7% of loan valueCan be higher
3 year ARMYesYesYesYes
5 year ArmYesYesYesYes

*Conventional loans are those that can be sold to Fannie Mae or Freddie Mac and have limits for the High Cost SF Bay Area Counties as shown at this link

*** No mortgage insurance on VA loans typically saves the veteran hundreds of dollars in monthly mortgage payments and is sometimes a factor in loan qualification since the monthly payment is lower.

Other than this, the VA loan transaction process is similar to that of a residential or conventional real estate transaction. The “VA mortgage banking officers” typically guide Veterans through the process of determining the amount of a VA loan they are qualified for.

The VA loan also allows for more flexibility in regards to qualifying and has far less stringent guidelines than a jumbo loan. With the ability to get a much lower interest rate, and less money down, you have the ability to keep your mortgage payment the same, or less, than other programs while not tying up all of your reserves.

Without Dan we would’ve probably abandoned the idea of buying a home in the Bay Area. What he did for us to get the home of our dreams was nothing short of INCREDIBLE. He made sure we were clear on every step of the process, and his attention to detail was impeccable. He is one of the hardest working people we have ever met–period. Super efficient, responsive, honest, with the heart of a lion. He pulled MANY rabbits out of hats for us, and all the while he was very enjoyable to work with day to day. He always made us feel like we were his only client. You need Dan in your life if you are buying or selling. Our realtor for life!

- Marilla and Adan Pulido (US Marine Veteran)–Happy Homeowners in Half Moon Bay, CA