As life goes on, changes are inevitable. Changes in income, marital status, and other life events can change the way you look at your mortgage payment. This is why understanding the difference between your refinance options after you’ve purchased a home is pivotal to making the right decision for you, which is why the VA Home Loans team is here to help you distinguish the difference!
Streamline refinancing is a very desirable option due to the potential for lower interest rates and monthly mortgage payments. Commonly known as a VA IRRRL, this refinance option allows you to have extended loan periods which gives you more time and flexibility to pay it off. This is one of the most popular refinancing options because it limits the amount of paperwork and stress that is involved with the process adjusting your mortgage!
With a more conservative approach, the cash-out refinance option is another popular choice. This alternative allows you to replace your current loan with a new one, as well as allowing you to liquidate cash out of your home equity. There are infinite options you can do with a VA-backed cash-out refinance, such as using it to pay off medical bills, pay for school, make home improvements, and more. While looking into this option you should know that lenders typically look for a credit score of around 650, as well as needing you to certify that you will refinance. The plus side is, as long as you meet all of the respected guidelines, you can finance your closing costs. Using money from your home equity to pay off high-interest credit cards statements could potentially save you loads of money, which is why this is such a sought after alternative!
Deciding which mortgage refinancing option is best for you is a tough decision, which is why VA Home Loans wants to give you some helpful insight. If you have any questions or need clarification, don’t hesitate to call us today for more information!