Which VA Refinance Loan? Cash-Out vs. No Cash-Out

The Veterans Administration (VA) refinance loan is primarily for veterans, active duty military personnel, reserve members and National Guard, and can allow for a cash-out or no cash-out option when applying.

Cash-out VA Loan

A cash-out VA refinance loan can lower your interest rate, give you a chance to pay off any high interest debt you may have accrued, pay for college tuition, make any home improvements, or take a vacation, etc. It uses the equity in your home and may offer up to 100% of the home's current value.

No Cash-out VA Loan

A no cash-out VA refinance loan allows you to keep the equity in your home and by refinancing at a lower rate, it can lower your monthly payments, giving you monthly savings that you can either put back into the loan or use for something else, such as credit card debt.

Two Types of VA Loans

Fixed Rate-means your interest rate will remain the same throughout the life of the loan, usually for 30 years.

Adjustable Rate-will begin at a low monthly payment, but will rise or fall according to the Federal Reserve. People who are financially limited may consider this option as it offers a lower monthly payment at the beginning of the loan.

VA loans offer a lower cost because VA rates remain competitive with the current market conventional loans, even if you have had a bankruptcy. VA loans offer easier qualification due to certain terms that apply to those who qualify for a VA loan.

Go to the Department of Veteran Affairs site to find more about VA refinance loans.