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Do you own your home? If you are like many people and have a mortgage on your property, you may joke that it’s you and the bank who share the ownership. Still, you feel pride of ownership, along with the confidence that the equity you are building in your home will be there when you need it. Though the upheavals of the housing market over the last few years have changed the situation a bit, most homeowners still feel that their home has cash value that they can tap into in an emergency.
A cash out refinance loan allows you to do just that. This popular VA loan allows you to refinance your property at current low interest rates and also take out cash — up to 100% of the appraised value of the house in some areas. This means that if the house you bought for $125,000 appraises for $175,000 due to the market and any improvements you have added to it, you might be able to obtain a new mortgage at lower interest rates for $175,000 and receive back up to $50,000 in cash. However, your closing costs and the VA loan fee will reduce this amount somewhat.
Though you cannot get a VA cash out refinance loan for a “frivolous” purpose, you can obtain one to pay off debt, remodel your house, pay college tuition, or any other “good” reason. You should think about this carefully as you might not want to be paying credit card bills for 30 years, but having lower payments as a result of a lower interest rate might make this a good trade-off.
As with loans for the purchase of new homes under the VA loan program, you must submit a Certificate of Eligibility to an approved VA lender. Your mortgage may have originally been a conventional loan, so you may not have a COE on file. If you have a DD 214 that shows your terms of service, you or your lender can obtain a COE if you meet certain criteria for eligibility:
If your discharge was honorable and your records are complete, establishing your eligibility should be a simple matter for your lender. On the other hand, if you need to appeal your status or the VA needs more information to document your service, the loan approval process can take longer.
If you are eligible, FortressVALoans.com wants to help you receive the benefits you earned. Visit our website to apply online, or contact one of our experienced loan specialists at (855) 383-5002. We will process your VA cash out refinance loan quickly to offer you the benefit of lower interest rates and cash in hand.