Veteran (VA) Refinance Loans - Are you missing out?

Happy 4th of July!

With the holiday in sight, it is important for our Veterans to know the options they have available. I found this great article on line to share with you and hopefully for you to pass on to anyone you know that this may apply to...

Author: Gina Pogol

"Believe it or not, many people who are eligible for VA home loans actually wind up taking out conventional mortgages to buy or refinance their homes. "I've been finding that there are retired veterans who didn't realize that refinancing to a VA loan from their conventional loan was even an option," says Tim Storm, a certified mortgage planning specialist and mortgage blogger from Orange County, Calif.
If you are eligible for a VA home loan but have a conventional mortgage, you probably had good reason for choosing the non-VA loan, such as:

1. You needed a sub-prime mortgage


2. You couldn't properly document your income


3. You had a down payment and chose to avoid the VA funding fee


4. You wanted a Pay Option ARM, interest-only mortgage or other exotic loan


5. Your home's price exceeded the VA limits


6. Your condo was not VA-approved

Today, however, it may be to your advantage to refinance to a VA mortgage if you qualify. If you have improved your credit, been self-employed long enough for your income to be counted, if your condo has obtained VA approval, or if you can get a better interest rate with VA financing, it's time to think about making the switch.

VA loans can be better for those with less equity
"With the drop in property values over the past four or five years, borrowers who had 20 percent equity or more are now in a situation where they have no equity," says Storm. "Some are in 5-year ARMs and would like to refinance into a 30-year fixed loan. Some have a second mortgage or equity line and would like to combine the first and second into a new 30-year fixed mortgage. But without 20 percent equity they are not able to get into a low [-rate] conventional 30-year fixed loan without paying mortgage insurance. VA rates are low--in many cases lower than conventional rates--especially since VA does not have as many pricing adjustments for property type, FICO, LTV, etc."

Refinance your subprime loan to VA
The Veterans' Benefits Improvement Act of 2008 made it possible for veterans to refinance up to 100 percent of their homes' value, an increase over the previous limit of 90 percent. One reason for implementing this change was to "allow VA to assist a substantial number of veterans with subprime mortgages to refinance into a safer, more affordable, VA guaranteed loan," said Secretary of Veterans Affairs Dr. James B. Peake in a 2008 press release. "Veterans in financial distress due to high rate subprime mortgages are potentially the greatest beneficiaries," he said.

If you're thinking about refinancing, check with an approved VA lender when you shop for your home loan. It might be the best choice for your next refinance."

For the full article please go to:

http://library.hsh.com/articles/refinancing/vets-dont-overlook-a-va-mortgage-for-your-next-refinance.html