If you’re an eligible veteran, active-duty service member, or surviving spouse, you can refinance your existing mortgage into a new VA-backed loan through a VA refinance. This can help you lower your interest rate, reduce your monthly payments, or access cash from your home equity. It’s a smart way to tap into your home’s value—with no out-of-pocket costs.

A VA loan refinance allows eligible borrowers to replace their existing VA loan with a new one under more favorable terms. There are two main types of VA loan refinances: the Interest Rate Reduction Refinance Loan (IRRRL) and the VA Cash-Out Refinance.

Interest Rate Reduction Refinance Loan (IRRRL):

Also known as the VA streamline refinance, the IRRRL is designed to help veterans and military personnel lower the interest rate on their current VA loans, decreasing their monthly mortgage payments. The process is relatively straightforward and typically requires less paperwork compared to a conventional refinance.

VA Cash-Out Refinance:

This option allows homeowners to refinance their existing mortgage while also tapping into the home’s equity. Homeowners can refinance up to 100% of the home’s value, giving them access to cash which can be used for a variety of purposes such as home improvements, debt consolidation, or tuition expenses. Unlike the IRRRL, VA Cash-Out Refinance can replace both VA and non-VA loans.

Refinancing through a VA loan can offer a range of benefits:

Lower Interest Rates
You could secure a lower interest rate than your current loan. This change can help in reducing your monthly mortgage payments as well as the overall amount paid over the loan’s lifespan.

Reduced Monthly Payments
Refinancing at a lower interest rate generally results in reduced monthly payments, allowing you to allocate savings elsewhere in your budget.

Access to Home Equity
You can access the cash value of your home, which can be used to finance various needs like home renovations or paying off high-interest debt.

No Private Mortgage Insurance (PMI)
VA loans do not require PMI, which is another potential cost-saving element of refinancing through a VA option.

Streamlined Process
The IRRRL is designed to be a quick and hassle-free refinance option with minimal paperwork and no need for a new appraisal, leading to a faster approval process.