What Is a VA Refinance Loan?

Many homeowners turn to a VA refinance loan in order to refinance their existing mortgages. This type of loan is offered by the Veterans Administration. If you are active military or a veteran, you should be able to qualify for this type of loan. Here are the basics of a VA refinance loan and how it can help you as a borrower.

VA Refinance Loans

A VA refinance loan is backed by the federal government. You should not have to come up with any money, as long as the loan is below $417,000. If you borrow more than that, you will have to pay 25% of the difference between $417,00 and the sales price.

You will also be able to take advantage of more flexible approval terms. Since the federal government is backing the loan, lenders offer a different set of approval guidelines. This opens the door for many that would not be able to be approved on their own. A VA refinance loan also comes with no prepayment penalties and limits on closing costs. Therefore, if you qualify for a VA refinance loan, this could be one of your best options.

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