A VA loan, or a Department of Affairs cash-out refinance loan, is an offer that allows homeowners to get cash in exchange for equity for their house. It is an efficient way for members in active military service and veterans to gain access to capital on-demand.
Is this an opportunity that makes sense for you? Keep reading to learn more about VA loans.
What Is a VA Cash-Out Refinance?
The VA loan is a mortgage available to people who have served in the military, either active or reserve. The loan is guaranteed by the federal government, which allows it to be given at a discount.
While the VA loan is typically for a smaller amount, it does not cap the amount of money you can borrow. These days, it’s possible to get a loan of up to $552,000.
A VA cash-out refinance is a loan that allows veterans the opportunity to get cash in exchange for the equity in their homes. It is a popular option for veterans who want to turn their equity into cash with a VA cash-out refinance.
How Does a VA Cash-Out Refinance Work?
For a VA cash-out refinance, you need to be willing to sell your home or have enough equity in it, to repay a second mortgage. Another option is to have enough equity to pay off the loan in cash or have equity that can be quickly liquidated.
Because this refinance is not secured by a mortgage, you will need to offer something in exchange for the cash you get. A VA cash-out refinance is an excellent option for veterans who have enough equity or the ability to quickly get the money that they can use for any number of purposes, including paying off debt and investing in something else.
To find out how much cash you are eligible to receive, you may opt to use a VA cash-out refinance calculator.
Does a VA Cash-Out Come with Extra Costs?
There are some extra costs to consider when it comes to a VA cash-out refinance. For starters, you will need to pay for a title policy and tax stamps. You may also need a VA appraisal and an inspection.
If you are planning on using the money to pay off credit card debt or to pay for a vacation, you will also have to pay closing costs.
Is a VA Cash-Out Refinance the Best Option for You?
A VA cash-out refinance can be a good option for veterans who have enough equity in their homes to cover the costs. Keep in mind that the costs of a VA cash-out refinance can be considerable, so you should be sure that it will be worth it.
It can be an especially good option for veterans looking to use the cash to pay off debt. If you have debt costing you more than your mortgage, it can make sense to do a VA cash-out refinance and pay off the debt.
It can also be a good option for veterans looking to use the money to invest if they can get a good return on their investment.
If you’re a veteran who wants to take advantage of the VA cash-out refinance, it is always important to do your research. Use this as your guide to understand this option better and to find the right loans for you.
If you are considering doing a VA cash-out refinance, make sure to check out Cross Timbers Mortgage. We offer VA loans in Oklahoma and Florida for people looking to refinance their homes, as well as financial solutions, whatever their needs and goals may be. Schedule an appointment today to learn more.