There are a couple of VA refinance tips and tricks that you should be aware of. One that catches some people is that the VA rollover can only increase the term of the existing loan by 10 years, up a maximum of 30 years. So, if you are refinancing an existing VA loan that is over 10 year old, make sure your new loan term is correct. If you have any questions about VA refinancing please click here.
If you are going from one fixed rate loan to another the interest rate needs to be lower. If you are going from an ARM to a fixed rate the interest rate can be higher.
The funding fee for most IRRL loans is .5% and is added to the loan amount.
All outstanding collections and judgments must be paid in cash at closing.
On VA refinances where the payment is increasing by more than 20%, the lender must certify that the veteran is able to handle the new payment amount.
Borrowers are allowed to finance all of their closing costs and discount points but are limited to a maximum of 2% in discount points.
An assumed loan cannot be rolled over unless there is a release of liability and a substitution of entitlement.
You cannot refinance other liens, only existing VA loans.
The maximum loan is calculated by taking the existing VA loan balance, plus allowable fees and charges, plus up to two discount point, plus the cost of any energy efficient improvements, plus the VA funding fee.
Most lenders can close streamline loans automatically, except of the loan being refinanced is 30 days or more past due, prior to approval is required.
The no cash back rule allows for a 500.00 tolerance.
The property must be currently occupied or previously occupied by the veteran.
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