How To Do a Conventional to VA Refinance on Your Mortgage Loan
If you’re wondering if it’s possible to do a conventional to VA refinance on your current mortgage loan, we have great news for you. According to the U.S. Department of Veterans Affairs, you can as long as you are a qualified veteran and meet the eligibility requirements of the VA Cash-Out Refinance loan. The loan enables you to take advantage of all the extra VA loan benefits, such as low interest rates, no down payment, and no required personal mortgage insurance. Here are the steps necessary to make this change happen.
1. Make Sure you Qualify
The following qualifications need to be met to qualify for the loan:
- Complete your Certificate of Eligibility
- Certify the home is your primary residence
- Maintain a credit score of 640 or higher
- Meet the lender’s debt-to-income ratio financial requirements
If your credit is poor or you are carrying a lot of debt, it is best to resolve those issues before applying for this loan.
2. Shop for a Lender
Although the VA guarantees these loans, it does not fund them. Instead, you obtain one from a mortgage company, bank, or credit union. It is worth your time to shop around with a few lenders to find the one that offers you the best rate and terms.
Beware of any advertisements you see or receive in the mail from companies offering unbelievable deals. These often have hidden fees and costs or are for risky adjustable-rate loans. Instead, stick to reputable lenders with track records for integrity.
At UW Funding, we are committed to getting you the best possible rate for your mortgage. We will walk you through every step of your refinance loan – from your initial application to the closing.
3. Apply for the VA Cash-Out Refinance Loan
Apply for the VA Cash-Out Refinance loan and promptly provide your chosen lender with all the documents requested with your application. You can borrow up to 100% of the home’s value, and a professional appraisal is done to verify that amount.
Be aware that you are charged a VA Funding Fee payable to the Department of Veterans Affairs. If this is your first time getting a VA loan, your fee is currently 2.3% of your loan amount and 3.6% if you’ve had a VA loan in the past. You are exempt from this fee if you have a service disability. You can finance the Funding Fee and your closing costs into your new loan as long as you stay under the loan-to-value ratio required by your lender.
4. Close on Your Loan
Once your loan is approved, you need to wait a few days for the paperwork to be filed and the funds to be wired to pay off your former loan.
Follow these four steps to do a conventional to VA refinance on your current home loan and get all the VA loan perks your service has earned you.
Contact us today to get started on refinancing your current mortgage to a VA loan. We are ready to save you money with our competitive rates and wow you with our personal service.