What is VA Cash Out refinance?
The cash-out refinance loan is for those who want to turn home equity into cash to pay for things like school and home improvements (or for any other purpose acceptable to the lender). This refinance can also be used to pay off other debt, as well. The cash-out refinance is not a home equity loan, which is basically a second mortgage on your home. Instead, it replaces the original loan on your home. Additionally, this refinance will often give you a lower interest rate than you had on your previous loan.
The cash-out refinance option is not just for people who have had a VA purchase loan on their home. Qualifying veterans can use the cash-out refinance to get rid of their conventional loans and get VA loans instead. This is a great way to take advantage of the many benefits of the VA’s loan program, especially its lower interest rates and easier qualification process.
Most members of the military, veterans, National Guard members, and reservists are eligible to apply for a VA cash-out refinance loan. Spouses of military members who died during active duty or because of a service-connected disability may also be eligible, as are military spouses in some other situations. Strive Lending can help you determine whether or not you are eligible for a VA cash-out refinance and the benefits it provides.
Though the US Department of Veterans Affairs is not a direct lender for such loans, private lenders like Strive Lending provide loans that are then partially guaranteed by the VA, as long as all the VA’s guidelines are met. Because the VA guarantees the loans, they are less risky for lenders. Less risk means that borrowers get some significant benefits.
Who is eligible for Cash Out Refinance?
- Active members of the military
- National Guard members
- Spouses of military members who died during active duty
- Spouses of military members who had a service-connected disability
- Spouses of military members in some other situations