How To Refinance Into a VA Home Loan Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: On This Page
Smederevac/Getty Images April 07, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Jeffrey L. Beal, president of Real Estate Solutions, has 40 years' experience in multiple phases of the real estate industry. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Refinancing your current mortgage into a VA loan can be a smart move if you’re an active-duty member of the military, a veteran or an eligible spouse who qualifies. Fortunately, meeting the criteria to isn’t overly difficult provided you meet the military service requirement and lender criteria. Who qualifies for a VA mortgage refinance
Generally, you become once you have completed 90 days of active-duty military service during a named conflict, six years of service in the National Guard or Reserves or 181 consecutive days of active duty during times of peace. You might also be eligible for a VA loan if you are married to a service member who died in the line of duty or as a result of a service-related disability. You must have been honorably discharged to qualify, unless you meet certain exceptions. In terms of additional , VA home loans require a that proves your military service. You also have to agree to occupy the home as your primary residence. From there, individual mortgage lenders set criteria that determine whether you qualify for a VA loan. Generally speaking, you’ll need a credit score of at least 620 to be approved for a VA loan or a VA loan refinance with the exception of an , which doesn’t require underwriting. Borrowers also need to show sufficient income to repay their loans, although the guidelines for approval are generally easier to meet when . What are the benefits of refinancing with a VA loan
The benefits of refinancing your mortgage with a VA loan are plentiful, which is why VA home loans are so popular among those who can qualify. VA loans don’t require a , whereas another government-backed loan, the FHA home loan, requires at least 3.5 percent down. However, you’ll still need to be prepared to pay refinance closing costs. Here are the other key advantages of refinancing with a VA loan: No mortgage insurance requirement: VA home loans do not require the borrower to pay mortgage insurance on top of the monthly mortgage payment, even with no down payment. Minimal upfront costs: VA loans typically charge a that the borrower pays upfront, which can be wrapped into the closing costs when you refinance. (If you choose this option, you’ll be financing these costs, so you’ll pay more in interest.) You can avoid paying the funding fee altogether if you are living with a service-related disability and meet specific requirements, or if you are the surviving spouse of a veteran who died in service or from a disability resulting from military service. Save on interest: are generally competitive, and often lower than what you might qualify for with a conventional refinance. Run the numbers though to calculate potential savings — some homeowners actually pay more in interest when they refinance and reset the loan term, even with a reduced rate. Flexible qualification criteria: The relaxed credit and income requirements on a VA loan make qualifying easier. (Note: The eligibility guidelines are more stringent for loans). No prepayment penalties: Like many other loans, with a VA loan, you can pay off your home early if you want without having to worry about added fees or “gotchas.” Potential for a predictable monthly payment: If you’re currently in an adjustable-rate loan, you can switch to a VA fixed-rate mortgage to get a predictable monthly payment. How to refinance into a VA loan
There are two main options available to you when you choose to refinance with a VA loan: Interest Rate Reduction Refinance Loan IRRRL
The Interest Rate Reduction Refinance Loan, or IRRRL, can be used to refinance an existing VA loan into a new VA loan with a lower interest rate. This loan is available without an appraisal or any credit underwriting, and you can include all of your closing costs in your new loan product. The funding fee for this type of VA refinance loan may be lower than the fee for applying for a VA loan to purchase a property. This loan can be a smart option if you can qualify for a lower interest rate because rates went down, and if you prefer to have a lower monthly payment. However, note that you cannot get cash out from your equity if you refinance your current VA loan with an IRRRL. VA cash-out refinancing
A VA cash-out refinance loan allows current homeowners refinance their mortgage and take out some or all of their accrued equity. With this type of refinance, veterans could get their hands on cash they could use to pay off debt, make home improvements and more. If you’re considering this option, have a clear goal in mind for the funds, and be realistic about your own habits. If you intend to use the cash to pay off credit cards, for example, you’ll need to be sure you won’t accumulate an unmanageable balance again in the future. This type of loan can be used to refinance an existing VA loan or a conventional mortgage, and the VA will guarantee loans worth up to 100 percent of the value of the home. Like other VA loans, this loan requires you to meet military service requirements and have a Certificate of Eligibility (COE) on hand. Bottom line
If you currently have a VA loan or a conventional mortgage and want to refinance into a VA loan with better rates and terms, use a to figure out how much your new mortgage payment might be. Also compare rates and terms across multiple lenders since loan providers ultimately set the rates and terms of these loans, and not the federal government. A can help you save money with a lower interest rate, limited closing costs and no upfront requirement for a down payment. If you already have a VA loan you want to refinance, an IRRRL could even allow you to switch to a new VA loan without any underwriting requirements SHARE: Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Jeffrey L. Beal, president of Real Estate Solutions, has 40 years' experience in multiple phases of the real estate industry. Related Articles