The VA Home Loan program allows qualified borrowers to take advantage of reduced monthly mortgage payments and lower loan rates, if they refinance their existing mortgages. Depending on the eligibility, veterans can refinance up to 100 percent of their home value. The two key benefits of VA refinance is getting a low-interest rate and cash-in-hand. Veterans who have chosen programs for first time home buyers in Texas or any other state, can reap the benefits of refinancing into a VA home loan. Let’s take a look at some of the key reasons to refinance a mortgage into a VA loan.
1. Lower VA Loan Rates
Refinancing is a great option for those who were not able to negotiate rates earlier when applying for first time home buyer programs. Therefore, whenever the interest rates are low, it can be a great idea to refinance your existing loan and get the benefit of lower interest rates. If you have the time to arrange the required documents and do the necessary paperwork, then it can save you thousands of dollars.
2. Shorter Loan Terms
Let’s say you have a 30-year mortgage running currently. If you want to reduce the term period, then you can do so without having to increase the monthly payments by a substantial amount. To know the exact amount that you are supposed to pay if you decide to reduce the loan term, use a mortgage calculator.
3. Reduced Monthly Mortgage Payment
Refinancing your existing mortgage into a VA loan with lower interest rates means reduced monthly installments. Some of the scenarios in which you may pay reduced monthly installments include refinancing a conventional loan into a VA loan, increasing the term period of your existing loan and more.
4. Home equity cash-out benefit
The VA loan program allows borrowers with equity in their home to get cash back through refinancing. But it only makes sense to get that extra cash if you can manage your debts responsibly. People, usually opt for the cash-out benefit to taking care of some important issues such as home improvement, or paying for a dependent’s education, and more.
5. Fixed rate mortgage
If you already have a mortgage running at variable rates, it makes sense to move to a fixed-rate home loan when you think the interest rates are lower than what they usually are. Locking the interest rates will help you ensure that you don’t have to pay more if the interest rates increase in the future.
VA under its Interest Rate Reduction Refinance Loan ((IRRRL) Program does not require any credit check or any form of appraisal. The documentation requirement for VA loan refinancing programs is also minimal, and therefore, it is beneficial for veterans to take advantage of refinancing whenever the interest rates are historically low. If you don’t want to go through the hassles of the paperwork and other formalities on your own, or simply too busy for that, get in touch with a VA loan expert, and they will take you through the entire process in a seamless manner.