Can I Refinance a Non-VA loan into a VA home Loan?
Over the years, I have had a few veterans that originally purchased a home with conventional or FHA financing ask me if it is possible to refinance out of their current loan and into a VA home loan. Having never used their VA home loan benefits before, they aren’t sure if this can be done – or what would be required to refinance a non-VA loan to a VA home loan.
So today I thought I would address this. Borrowers that purchased a home with a non-VA home loan can indeed refinance. However, the VA will treat this as a VA Cash-out refinance loan, as opposed to a simple rate and term refi.
Other VA Refinancing Options – VA IRRRL
As some of you know, the VA does offer a type of streamline refinancing known as a VA IRRRL (Interest rate reduction refinance loan). VA IRRRL’s can only be used for those borrowers who currently are in a VA mortgage. The VA does offer a cash-out refinance option that is available to all eligible Veteran/Active Duty borrowers, regardless of what type of existing mortgage they currently have.
One caveat that borrowers should be aware of before deciding to refinance out of a non-VA loan to a VA loan is that they will have to occupy the property as a primary residence. So if the property you are thinking of refinancing is an investment or a second or seasonal home, then you will be required to move into this property.
One big advantage of refinancing into a VA Cash-out loan is that they have no mortgage insurance. So if you would like to know more about refinancing out of a non-VA loan into a VA home loan, or any other mortgage financing questions, then please give us a call. 520-303-5620
If you have any questions on this topic, or other VA loan questions, then please feel free to contact us. And if you like this like this post, then please share or like… or leave a comment below.
Joseph Small and Team at Patriot Pacific Financial Corp – Arizona’s VA home loan experts! Proudly helping Veterans in Arizona and California. We are here to help serve you! (520) 303-5620