Veterans in both Palm Beach and Martin County have some great VA refinance options available today. Depending on your financial requirements and home equity, The VA IRRRL Streamline or Cash Out refinance could make sense. VA mortgage rates are still low, let’s take a closer look below at the VA refi options available to West Palm Beach residents.
Florida VA IRRRL “Streamline” Refinance Mortgage
A VA IRRRL loan is also referred to as “Streamline” refinance. The Streamline Refinance guidelines are very simple and straight-forward with little paperwork – hence the name “streamline” No cash can be taken out by the homeowner with this type of VA refinance. Closing costs and energy efficiency improvement costs can be included in the new loan in most cases. VA IRRRL guidelines do not require the lender to perform a new appraisal or credit, income underwriting as long as the loan that is being refinanced was also a VA-guaranteed loan.
This is huge because borrowers can be upside down or “underwater” on their home loan, it’s doesn’t matter. Borrowers that just want to lower their interest rate, change the loan term, or convert their current VA ARM loan to a VA Fixed rate loan can qualify for the streamline refinance mortgage. Contact us below to discuss current VA interest rates.
IRRRL streamline loans are not assumable and no “cash back” is allowed even if you do have equity, just standard closing costs that can be rolled into in the new mortgage. Second loans or home equity loans (HELOC) existing on the property must be subordinated to the new VA first mortgage.
Mortgage interest rates are still pretty low, veterans can lock in their rates by opting for a streamline loan offered by a VA refinancing lender. The $0 cost option is the primary driver of its popularity among veteran homeowners looking for “rate and term” refinance. One should carefully understand the specific refinance option’s guidelines and requirements to choose the appropriate option that fits their financing needs.
VA Streamline (IRRRL) Refinance Requirements
VA provides the backing (guarantee) for the lender providing financing to the veteran and issues the lending guidelines and standards. A veteran seeking a VA-backed home loan must qualify based on the bank or lender’s underwriting requirements related to income, credit and assets. A lender can choose to enforce their own “in house” criteria while evaluating a prospective borrower’s financial profile. VA loan eligibility depends primarily on the debt-to-income ratio.
The residual income left for the household after paying for all the housing-related expenses, monthly debt payments and taxes is used by approved VA lenders to determine the eligibility of prospective seekers of a VA insured mortgage loan. The residual evaluation followed in VA underwriting is much preferred to the plain vanilla debt-to-income ratio used in conventional residential lending guidelines.
Bank and lenders that finance residential properties based on conventional mortgage guidelines usually require a borrower to pay for Private Mortgage Insurance (PMI) when the loan to value is over 80%. However, VA allows 100% financing with no requirement of PMI on the loans they guarantee. Instead, an upfront funding fee is assessed on all VA purchase and refinance loan transactions. Veterans receiving disability compensation related to the service are exempt from paying the VA funding fee. $0 monthly mortgage insurance is a great benefit of VA loans.
Veterans Administration does not handle the loan process or provide the actual funds involved in VA home financing. All factors related to the loan pre-qualification and approvals are exclusively handled by the approved VA lender originating the residential loan. A VA lender also handles all the paperwork and processing of the loan, not the Veterans Administration.
Lenders also pre-qualify, complete loan applications, gather supporting financial documents, order the appraisal (when needed) and title, schedule a closing date and fund the loan. These steps performed during the VA loan approval are comparable to those followed in other government financing like FHA and USDA
The interest rates and discount points charged by lenders for financing VA home loans vary greatly according to applicant’s credit score and overall financial situation. Borrowers will have both fixed rate and adjustable-rate financing terms available. VA lending guidelines clearly emphasize the occupancy requirement.
Only properties to be occupied as a primary residence by the veteran after purchase can be financed through a VA loan program. The primary residence requirement can be waived for borrowers seeking faster financing through the streamlined VA IRRRL loan.
VA loan benefits can also be reused in the future. The home loan benefits offered by VA do not end after just using them once. Any unused portion of the loan benefit gets carried forward. All state, county and local housing programs or grants have blanket approval from VA. Due to this they can be utilized in combination with VA home loan programs without special permission or review. Grants and programs that are offered to buyers by other non-public entities must be approved by VA before the closing.
The guaranty provided by VA only applies to the lender underwriting and funding the home loan for an eligible veteran. A thorough house inspection is the best way for the buyer to make sure that no significant issues have been overlooked. An appraisal cannot be considered as a substitute for a home inspection as the former is a qualified opinion regarding the value of the property based on a rough overview of the property condition, the local market and recent sales, while the latter primarily assess the physical condition of the property by highlighting any issues that need attention.
VA Cash-out Refinance Requirements
For West Palm Beach VA borrowers that DO have significant equity, a VA cash-out refi may be the perfect way to consolidate other high-interest debt. VA cash-out refinance loan allows a qualifying veteran to pay off high interest debt credit cards, college loans and any other debt. One may also use refinancing to make further home improvements to increase their residential home value. The VA cash out refinance program will require a new appraisal to verify the property’s current value.
VA cash-out refinance guidelines require that the veteran still occupy the property as their primary residence. When sufficient home equity is available, the owner can take out up to 100% of the home’s value ( see below for more info on the 100% LTV cash out) All VA cash out loans can also include closing costs and other fees. As long as the LTV requirement is met, the seasoning of the loan may not be needed.
VA 100 Percent Loan To Value Cash Out
*100% VA cash-out options are now available for up to $1mil loan amounts.
One of the best reasons for using a VA mortgage to refinance an existing loan is the 100% loan to value feature. If a home currently has a loan provided by Fannie Mae, Freddie Mac, FHA, USDA or a private lender then the VA will allow veterans to refinance that loan to a VA mortgage and borrow up to 100% of the home’s appraised value in order to complete the loan.
This is a great benefit since most other programs limit the borrower to less than the total value of the home. While the VA does charge a funding fee for each of their loans (for nonexempt borrowers) the funding fee is added on top of the loan amount in order to allow the veteran to refinance without paying anything from their pocket.
The 100% VA cash-out refi can make very good sense for those West Palm Beach homeowners that do have good equity in their home, and want to consolidate high-interest debt. VA interest rates are low, it makes sense to cash out to pay off super high-interest credit cards, car loans, or installment loans. Contact us at Phone: 800-743-7556 to have a loan specialist do a full review and break down the numbers.
A number of VA lenders process these loans, however very few allow up to 100% loan to value cash out. Interested borrowers can also submit the quick Info Request Form and a VA loan specialist will contact you 7 days a week.
Gladly serving all of South Fla VA Refinance needs, including Palm Beach County and Martin County – Belle Glade, Boca Raton, Boynton Beach, Delray Beach, Glen Ridge, Greenacres, Gulf Stream, Haverhill, Highland Beach, Hypoluxo, Juno Beach, Jupiter, Jupiter Inlet Colony, Lake Park, Lake Worth, Lantana, Loxahatchee, North Palm Beach, Ocean Ridge, Pahokee, Palm Beach, Palm Beach Gardens, Palm Beach Shores, Palm Springs, Riviera Beach, Royal Palm Beach, Sandcut, South Bay, Tequesta, Wellington and West Palm Beach. Hobe Sound, Indiantown, Jensen Beach, Jupiter Island, Palm City, Sewall’s Point and Stuart