VA 100% Cash Out Refinance Loan allows eligible veterans to refinance their home and take out a loan for 100% of the value of the home. This VA Refinance Mortgage Loan is perfect for veterans who have built up equity in their home and need to tap into it to consolidate debt or take money out to renovate their home. If you would like to see if you qualify to get access your equity, give the John Thomas Team a call at 302-703-0727 or APPLY ONLINE.
What are the Guidelines for a VA Cash Out Refinance?
The VA 100% Cash Out Refinance Mortgage Loan allows eligible veterans to tap the equity in their home if they meet the following guidelines:
- Minimum 680 Credit Score for 100% Cash-Out Refinance up to $1 Million
- Minimum 700 Credit Score for 100% Cash-Out Refinance up to $1.5 Million
- Minimum 580 Credit Score for 90% Cash-Out Refinance
- Must Occupy the home as your primary residence
- Must be at least one eligible Veteran on the loan with a Certificate of Eligibility (COE)
- Must meet the requirements for a VA Home Loan
- Must have a VA Appraisal done on the property
- Must have a Pest Inspection done for a VA Cash Out Refinance
What are the Benefits of a VA 100% Cash Out Refinance Loan?
Veterans can have the following benefits of a VA Cash Out Refinance:
- Borrower Up to a 100% of Your Home’s Value
- Consolidate high Interest Consumer Debt and Increase Your Cash Flow
- Take Out Money to Renovate or Upgrade Your Home
- Take Out Money to Pay for your Children’s Education
- Put Money into Emergence Fund
- Put Money Into Retirement Accounts
How Does a Cash Out Refinance Work?
Refinancing a Home to take cash out with a VA Loan is very similar to a rate and term refinance of a traditional mortgage. The VA only Offers the following types of mortgages:
- VA Purchase Loan
- VA IRRRL Refinance Loan
- VA Cash Out Refinance Loan
- VA One Time Close Construction Loan
- VA Renovation Loan
The VA Cash Out Refinance allows a veteran to refinance and pay off any existing mortgage with one new VA Loan. You can pay off 1st and a 2nd lien and get cash out if their is enough equity.
For Example, lets say a Veteran bought a home 5 years ago for $250,000, was exempt from the VA Funding Fee, and used a VA down payment assistance program for 3% ($7,500) toward closing costs. The Down payment assistance is recorded as a 2nd mortgage loan at 0% interest.
Fast forward to today and the home is worth $300,000. The Veteran wants to take out money to renovate is kitchen for $40,000. The Veteran will need to pay off 1st mortgage and the 2nd mortgage in order to refinance.
- First Mortgage Payoff = $225,000
- 2nd Mortgage Payoff = $7,500
- Closing Costs = 8,000
- Cash-Out = $40,000
The total need to payoff everything is $280,500 which is only 93.5% of the value so still leaves the Veteran some equity of $19,500. If the Veteran qualifies in this case he could increase the loan amount to $300,000 and use the extra $19,500 to consolidate debt or put into an emergency fund.
How Do You Apply for a VA Cash Out Refinance?
If you are interested in a VA Cash Out Refinance and you or your spouse is an eligible Veteran then you can get started by calling the John Thomas Team of Primary Residential Mortgage at 302-703-0727 and one of our VA Specialists will review your situation with you. You can also APPLY ONLINE