When it comes to personal finance, one thing that all veterans should think about is leveraging your VA Loan Benefits. The VA Loan is one of the most beneficial loan programs out there for military members, with over 14 million veterans taking advantage of it since its beginning in 1944. If you’re thinking about refinancing your home, you can use the VA Loan Guarantee Program to your advantage. This is because the VA will essentially guarantee 25% of your loan to the respective lender should you default on it. With the lender having this insurance, they are willing to give you far more reasonable rates, with higher refinancing amounts available than you would receive from conventional loans.
Whether you’re interested in refinancing to pay lower mortgage payments, or wish to choose a cash-out refinance, there are several options. VA Loans are beneficial for veterans and lenders alike. It’s helpful to take a closer look at these benefits, which include the following.
- With those refinancing a VA Loan to another VA Loan you can refinance up to 100% Loan-To-Value (LTV).
- With those refinancing a non VA Loan you can refinance to a VA Loan up to 90% Loan-To-Value.
- There is no PMI if you are refinancing with a VA loan, which is good for long-term veterans and personal finance planning.
- There are relaxed credit guidelines with the VA loan, making refinancing easier.
- If you run into financial difficulty, you can receive assistance from the VA.
These are only a few of the various financial benefits that you can receive by applying for a VA Loan opposed to a conventional loan. Other benefits may apply, depending on your situation, including how long you’ve owned your home and how long you plan on staying in that property.
Those who are thinking of refinancing using veterans and personal finance loans should think about staying in their home long enough to reap these benefits. If you plan on moving soon, it doesn’t make sense to go through the process of refinancing. Another thing to think about is your current rate. If you are paying a rate of 4.5 % or higher, for example, you may be able to lower this by an entire percentage point through refinancing, which would make it worthwhile for your personal finances. A final reason to consider refinancing is if you are in need cash that otherwise would require you to take on debt at a higher interest rate then what is available.