A VA Loan Refinance Can Save You Money

Enjoy Historically Low Interest Rates With A VA Loan Refinance

With interest rates at historic lows, have you ever wished that the rate on your own home loan was lower? With current rates hovering between 3.4 and 4.5% so far in 2013, they are down from an average of 6% in 2008, 8% in 2000, and over 10% in 1990. Whether you have 5, 10, or even 20 years left on your mortgage, you can benefit from a VA mortgage refinance.

How Does A Refinance Work?

With a VA loan refinance from Capital Bank, N.A., you go through the mortgage qualification process once again. You also have your house appraised. Assuming you meet the credit requirements and that your house has held its value, a lender will offer you a lower interest rate on a new loan.

This is helpful in many circumstances:

  1. If your goal is to lower the payments and pay your home off quickly, you can sign up for a shorter loan term.
  2. If you need a lower payment over the long run, you can secure a 30-year fixed-rate mortgage and a lower rate.
  3. If you have an adjustable-rate mortgage (ARM), you might want to lock in a mortgage at a low fixed interest rate.

Getting Cash Back

Some Veterans with high-interest home loans find themselves with high levels of credit card debt, upcoming college expenses for their children, or looming repair bills on their homes. They may want to remodel the kitchen or have money free to help out their aging parents. Some VA mortgage refinance plans allow an eligible Veteran to receive cash back from their refinancing transaction as well as a lower interest rate. Tapping into the equity in your home can be an excellent way to pay off high-interest debts or take care of personal business at a reasonable cost.

VA Loan Refinance Advantages

With interest rates so low, many homeowners are interested in refinancing however they can. However, a VA mortgage refinance offers qualified Veterans several advantages:

  1. The VA guarantees part of the loan to the mortgage company.
  2. An appraisal on the home will verify its value.
  3. All Veterans can access this benefit, regardless of race, color, religion, familial status, or natural origin.
  4. Credit criteria are less strict for a VA mortgage refinance.
  5. The VA limits closing costs.
  6. VA loans offer 15- or 30-year repayment periods.

The Reality Of Closing Costs

For most civilian homeowners, high closing costs are often a reality check as to whether a refinance is worth it or not. For those who don’t plan on staying in the home for several years, the closing costs can eat up interest savings. Many VA mortgage refinance packages eliminate closing costs altogether. If you shop around, you can find a deal that makes refinancing a no-brainer. However, the old maxim about “no free lunches” applies in the loan industry as well. When lenders offer loans with no closing costs, they have to compensate somewhere, so examine loan terms carefully. If you cannot finance any closing costs, you may be able to obtain a cash-out to cover these costs.

Whether you buy a house or refinance through the VA, there is a VA funding fee of up to 3.15% of the loan amount. This can be rolled into the mortgage, but unless you are exempt, it will eat into your cash back or increase your mortgage.

How’s Your Credit?

Many homeowners who need to refinance because they are struggling to pay their bills do not qualify for many refinance programs. When lenders see a pattern of financial problems reflected in a credit report, they are reluctant to take on the risk of loan. With VA mortgage refinance programs, credit rules are relaxed, which makes eligible Veterans with less-than-perfect credit able to qualify for these government programs. However, the lender still needs to be convinced that a VA borrower is able to repay the loan. A VA approved lenders such as Capital Bank, N.A. will discuss what you need to do to position yourself for a VA mortgage refinance.

Qualifying For VA Mortgage Refinance

A VA mortgage refinance can be a great deal for most Veterans. How do you qualify? The requirements are basically the same as for other VA loan benefits. You can qualify if you are:

  1. A Veteran who served a minimum of 90 days in wartime or 181 days in peace time.
  2. A current service member with a minimum of 90 days of service.
  3. A member of the National Guard or Reserves, with a minimum of six years of service.
  4. The surviving spouse of a service member killed in action, a prisoner of war, missing in action, or disabled, who has not remarried.
  5. Discharged due to hardship, at the request of the government, or due to reduction in force or certain medical conditions or disabilities.

As long as you have an honorable discharge, you will be able to obtain a Certificate of Eligibility (COE) from the VA. Capital Bank, N.A. can help you obtain this in a few minutes, assuming that your records are in order. If your discharge was classified in any other way, you may be able to appeal.

Start The Process Today

Obtaining a VA mortgage refinance makes good sense if you want to take advantage of lower interest rates. If you meet the basic requirements, you can lessen your financial burden, and Capital Bank, N.A. is waiting to tell you how. Get preapproved online today or contact our qualified loan specialists at (866) 216-3577.