VA Loans & Refinancing

Many veterans take advantage of the VA Home Loan Guarantee Program. This benefit allows veterans to purchase a home with no money down and the VA will guarantee a portion of the loan to the mortgage lender in order for the veteran to have an easier time qualifying for the loan. For those veterans who already have a mortgage loan there are also refinancing options that are offered by the VA through the Home Loan Guarantee Program.

One of the options the VA offers are Interest Rate Reduction Refinancing Loans. This is a refinancing loan that is for people who already have VA Home Loan Guarantees on their mortgage and are refinancing in order to get a lower interest rate. This type of refinancing offers veterans a chance to lower their monthly payment by refinancing their loan to a lower interest rate. Paying no costs out of their pocket because the VA allows you to include all of the refinancing costs into the new mortgage loan. No appraisal is required by the VA, but your lender will most likely require an appraisal in order to determine the fair market value of your home so that they can make a informed decision regarding how much to lend you depending on your equity and other factors. No credit check is required by the VA, but your lender will most likely require a new credit check. The lender is writing a new loan with new terms when you refinance and they will want to check your credit worthiness in order to make sure that no major changes have occurred since you originated the loan. A Certificate of Eligibility is not needed by the VA for refinancing. The current loan is already guaranteed by the VA so your eligibility was proven in the past in order for you to use your entitlement in the program.

It is important to remember that the VA also has some guidelines for veterans who are refinancing with a Interest Rate Reduction Refinancing Loan. The new mortgage MUST have a lower interest rate than the current mortgage. The only exception to this rule is if you are refinancing from an adjustable rate mortgage to a fixed rate mortgage. In this case the VA allows you to refinance to a higher mortgage rate in order to lock in a fixed monthly payment. This will most likely save you money in the long run because adjustable rate mortgage loans will often have an interest rate that rises to the maximum and can rise to payments that are too high.

For more information on Interest Rate Reduction Refinancing Loans and VA refinancing options go to http://www.vamortgagecenter.com