If you are looking to refinance your mortgage, a VA loan refinance may the simplest way to do so. For those who currently have a VA loan, refinancing may lower their current interest rates and provide cash to improve their house. Quite often, the process takes less than a month to complete.
The VA refinance loan is also called the Interest Rate Reduction Refinancing loan. It works a bit differently than the original VA loan. The homeowner does not have to do the same process. No eligibility paperwork is required and no appraisals are needed for the VA. This cuts down on the processing time greatly. Homeowners cannot be behind on their mortgage payments and the refinance must be on the same home that the VA loan is for.
Instead of working with the VA, the homeowner will work directly with the lenders. It is best to comprise a list of possible lenders and set up interviews. Each lender will offer different interest rates and loan periods. It is important to let the lender know that you will be using your VA loan to refinance your home. This often leads to lower interest rates as the loan is guaranteed by the VA.
Be prepared to bring paperwork to the lender that you have chosen. While the VA does not require any new paperwork, some lenders will. Generally, lenders will like to see recent paychecks and past tax returns. They may also ask to see your checking and saving account balances as well as any other loans you may currently have. This will show that you will be able to continue to make payments on your mortgage under your new loan.
Before you sign any paperwork for a refinance, take a look at the whole picture. Signing a new loan will include costs that you may not be prepared for. Some lenders will require you to get a new home appraisal which can cost about three hundred dollars. New loans also have a variety of fees such as applications, titles and loan originations. Your monthly payments should be significantly lower, allowing you to come out ahead in a few months.