Question 1

May I refinance my non-VA loan to a VA Loan?

Accepted Answer

Yes, but you must use a VA Cash-out and Rate & Term Refinance. A VA IRRRL loan is not an option for this loan situation.

Question 2

Will refinancing my VA loan lower my monthly payment?

Accepted Answer

The answer depends on a full comparison between the rate and term of your current VA loan and the proposed rate and term of the new VA loan. A VA IRRRL refinance provides a low-cost way to reduce your interest rate, so it makes sense that you could lower your monthly payment if you keep the same loan term as your current mortgage. However, if you decide to reduce your loan term, say from 30 years to 15 years, your monthly payment may actually increase even if you reduce your interest rate.

A full comparison of your current and new loan with the VA Cash-out and Rate & Term refinance will reveal whether your monthly payment will decrease. For example, if you decide to use the refinance to cash out some equity in your home, you will most likely increase your loan amount, which will probably increase your monthly payment. Of course, a change in your interest rate will affect your total monthly payment. Ultimately, you will need to conduct a side-by-side comparison of your current mortgage and your new loan terms.

Question 3

May I refinance to an ARM?

Accepted Answer

Yes, you can refinance to an adjustable rate mortgage. However, you must use the VA Cash-out and Rate & Term Refinance.

Question 4

May I refinance to a VA loan to get a mortgage with a shorter term?

Accepted Answer

Yes. Either a VA Cash-out and Rate & Term refinance or a VA Streamline IRRRL refinance will permit you to shorten your current mortgage term.

Understanding VA Loan Refinancing Options

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