There are many options available for your Va loan refinance. You can make it even easier on yourself by following a few tips that will give you a leg up on the competition. First of all, before you begin researching all of your options, make sure you know exactly what kind of return you want from your VA loan refinance. This will make the process much easier and faster, so be sure to ask yourself these questions before you begin shopping for refinanced mortgages:
What is the risk to the lender of refinancing the conventional loan? By its very nature, a conventional loan is considered safer than a VA loan refinance. But to get the best rates, many people choose to use their home equity. And when you add the fact that the government will never really help the banks out when they foreclose on your home, you have a recipe for disaster. You do have other options, however, for improving your odds of success.
How much equity do you currently have on your home? If you have a significant amount of equity in your home and you have been paying your mortgage loan regularly, you may be able to qualify for a conventional loan with some additional financing terms or provisions. If you are currently paying cash for most of your monthly mortgage payments and want to expand your savings by refinancing to a conventional loan, this option could be right for you.
Will you be increasing or decreasing your monthly payment? Many people are finding that a number of the new interest rates on both the A & B loans listed above are too high to comfortably make the payments. You may want to check with your current lender and see if they are willing to work with you. The good news is that even some major lenders are offering to refinance home loans for people who need or qualify for better interest rates.
What kind of terms do you want for your new loan? You might be able to get a longer-term refinance to reduce your monthly payment for five, ten, or fifteen years. On the other hand, you might want to find a shorter-term refinance to get a lower monthly payment for two, three, or four years. Do your homework and decide what works best for you. You should also consider the possibility of getting a lower monthly payment for five years and then moving back to a longer-term refinance for six, seven, or eight years.
How much income will you bring in when you are done with the service? You can probably qualify for a VA home equity loan refinance even if you aren’t yet fully retired. Just make sure that you are still counted among active-duty service members on your next federal tax return and that you qualify for a reasonable interest rate. If you will be retired within the next two to five years, the better your FAFSA (Free Application for Federal Student Aid) will be for your income and loan eligibility. Finally, remember that if you do qualify for a VA home loan refinance, it doesn’t always mean that you can qualify for the lowest possible interest rate. You’ll need to do some research into the best rates for you.