Should You Refinance Your VA Loan? VA Cash Out or VA IRRRL?

Are you a veteran who wants to move ahead financially?  As a veteran homeowner you’ve got a lot of tools you can use to improve your finances on a monthly and long-term basis.  You can use a VA Cash Out Refi or a VA CIRRI (Interest Rate Reduction Refinancing Loan).  Which choice is right for you?  It depends on your needs and circumstances.

How does a VA Cash Out Refinance work?

If you’ve got equity in your home, you can use a VA Cash Out Refinance to receive cash for any reason you want.  If you’ve paid off $50,000 on your mortgage, for example, you could be eligible to get $50,000 in cash and even lower your mortgage rate at the same time.

What can I use the money from a VA Cash Out Refi for?

It’s up to you. You could use the cash to pay down high-interest credit card debt, eliminate mortgage insurance on a conventional loan, or buy a car or boat.  Your refinanced VA mortgage will be almost certain to have a lower interest rate than an auto loan or a boat loan.

What if I don’t need cash?  What are my VA mortgage refinancing options then?

This is where the VA IRRRL comes in.  The Interest Rate Reduction Refinancing Loan can lower the interest rate you’re currently paying for your VA mortgage.  You may be amazed at the things you don’t need to get a VA IRRRL that could lower your mortgage rate and your monthly payments.

You can get an IRRRL without any of the following:

  • No proof of income – pay stubs or W2s

  • No bank statements

  • No home appraisal needed

  • No loan-to-value limits on IRRRL

You can even roll your closing costs into the loan, and your VA funding fee will be lower than for an original VA home purchase loan.  And if you receive ANY DISABILITY PAY you MAY BE ELIGIBLE for NO FUNDING FEE.  Even if your home is “underwater,” you can get a VA IRRRL.  VA IRRRLs are for the benefit of veterans, so in the event, the actual veteran is out of work or temporarily unemployed, as long as one other borrower on the loan such as a spouse or any other co-borrower is currently employed they are still eligible for the refinance under the IRRRL program to reduce their interest rate and/or monthly payments.  You don’t need income to qualify for the IRRRL refinance.

Whether you’re a veteran who needs cash to pay off high-interest credit cards, make home improvements or remodel, or buy a car or boat, or you have a higher interest rate VA loan that you want to refinance, you have options through a VA Cash Out or VA IRRRL loan.