The VA Cash-Out Refinance is the answer for homeowners who want to take cash out of their home equity for things like making home improvements, paying off debt, funding school, establishing an emergency fund, or any other financial need that they might have. A Cash-Out Refinance Loan can be used to refinance a non-VA loan, such as a Conventional or FHA loan into a VA loan. VA will guaranty loans up to 100% of the value of your home depending on Loan Limits that have been pre-determined for the county your home is in. Many others lenders cap the amount of money you can borrow against your home to 90% of the home's value, but at Fairway we allow up to 100%. In some situations an additional 10% can make a large difference (ex. on a home valued at $200,000 that's an additional $20,000 you could potentially borrow!)
Here are some things that you need to know about the VA Cash-Out Refinance:
- The liens to be paid off may be current or delinquent and from any source, such as tax or judgment liens or VA, FHA or conventional mortgages.
- Loan proceeds beyond the amount needed to pay off the lien(s) may be taken as cash by the borrower for any purpose acceptable to the lender
- The loan must be secured by a first lien on the property.
- The maximum loan amount is 100 percent of the appraised value, plus the cost of any energy efficiency improvements, plus the VA funding fee.
- The veteran must have sufficient available entitlement for the loan.
- If an existing VA loan on the same property will be paid off by the refinancing loan, the entitlement used for that existing loan can be restored for purposes of obtaining the new loan.
- The veteran must certify that they intend to personally occupy the property as their primary residence.