Refinancing your VA loan
Julie Garton-Good, GRI, DREI

Refinancing is once again in the air. And if you're thinking of refinancing your Veteran's Administration mortgage, it may be even easier than you think! Veteran's Administration loans are to benefit those who served in the United States military or reserves, and refinancing VA loans has never been easier than with their interest rate-reduction refinancing loan. This loan pulls no equity out of the property, but merely refinances existing debt.

Here's how it works. The existing loan must be a VA loan and the new rate must be lower than the previous rate. The loan may include the outstanding balance on the existing loan, allowable fees, and closing costs (including discount points and funding fees.) The lender could agree to pay all closing costs and set an interest rate high enough to recover these costs (called premium pricing), but the final interest rate must still be lower than that of the existing loan.

This interest rate reduction loan does not require an appraisal nor a credit check from the borrower. In fact, the veteran/owner doesn't even have to currently occupy the property (meaning it could be currently used as a rental property). This method of refinancing is offered to veterans in an effort to keep the interest rates on existing loans competitive with new ones, curbing foreclosures and making home ownership more affordable for America's veterans.