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VA Cash-Out Refinance

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What is a VA cash-out refinance?

Like any refinance, a VA cash-out refinance loan is a new home loan. However, what makes it special is that it allows you to take cash out from your home's equity. This money can then be used for any number of purposes, including debt consolidation, vacation funds, college tuition, and anything else you can dream of.

When should I get one?

For starters, you can only get a VA cash-out loan if you have equity built up in your home. It usually takes a number of years to build equity, though it may depend on how the housing market is in your neighborhood. If house prices are rising significantly in your area, you may be building equity faster.

Other indications that a cash-out refinance is a good idea for your situation include:

  • You want to get into a VA loan from another loan type
  • You have a plan for how you want to use the money
  • You want to take advantage of lower interest rates

Pros & cons of a VA cash-out refinance loan

Depending on what your goals are, a VA cash-out loan could be the right choice to help you make them happen. Check out the lists of pros and cons below to weigh the benefits and potential negatives of this type of refinance loan.

 
Pros of a VA cash-out loan:
  • Consolidating your debt into a single (home) loan
  • Making home improvements outside of the scope of an EEM
  • Creating a large cash reserve for future financial difficulties
  • Getting a lower interest rate
  • Paying for your child's college tuition
  • Going on a family vacation
  • Being able to finance 100% of your home's value (minus any closing costs being rolled in)
  • Eliminating mortgage insurance (if your current loan is not a VA loan)
  • Financing the closing costs into your loan
Cons of a VA cash-out loan:
  • Extends the time until your home is paid off
  • More time-consuming than a VA IRRRL
  • Has more paperwork than an IRRRL
  • Requires a home appraisal
  • You must still occupy the home as your primary residence
  • Has a higher funding fee

The Process

How do I get a VA cash-out refinance?

Essentially, the process to get a VA cash-out loan is the same as the process to get a VA purchase loan. So, if you don't already have a VA loan, you'll first need to meet the VA's eligibility requirements.

Once your eligibility is established, you'll have to verify your employment and income with your W2 forms for the last two years, two months of pay stubs, your two year job history, and more. You'll also need to provide a full accounting of your assets and liabilities and have your home appraised by a VA appraiser. This process typically takes at least 30 days or longer.

How to

Get Started

If you're ready to put your home's equity to work, our loan officers can help you with a VA cash-out loan.

Call us now to discuss a VA cash-out refinance: (866) 569-8272.

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