There’s a growing trend in mortgage applications, mainly due to homeowners wanting to refinance their current loans. This trend strongly indicates that it is now an opportune time for American veterans to take advantage of a VA refinance.
Last week, the demand for refinancing loans reached unprecedented levels, the highest since early June, according to data from the Mortgage Bankers Association. Cumulative applications for purchase and refinance loans saw a week-over-week increase of 7.5%, as of August 21. The refinancing application rates continue to hold a greater market share.
With the housing market displaying positive momentum, veterans who have VA or standard home loans might want to assess the potential advantages of refinancing through the Veterans Administration.
The VA offers varied refinancing provisions for veterans with VA loans and those with conventional loans. Veterans who have used VA loans to purchase their homes can leverage the VA’s Interest Rate Reduction Refinancing Loan, commonly referred to as a VA Streamline.
The beauty of VA Streamline loans is that they do not require credit underwriting, eligibility certificates or even appraisals. Even veterans with less-than-stellar credit histories may be eligible for a Streamline. However, applicants are expected to be up-to-date with their mortgage payments and not have more than one late payment of 30 days within the past year.
Several veterans are eligible for a VA Streamline without incurring out-of-pocket expenses. In addition, borrowers are allowed to incorporate up to $6,000 for energy-efficient improvements into their Streamline loan.
The VA’s funding fee (0.5%) applies to Streamline beneficiaries, which can be paid in cash or added to the loan cost. Any lender with the necessary approval can issue a VA Streamline, so veterans aren’t restricted to staying with their initial lending institution administering their current VA home loan.
Veterans with conventional loans can also use the VA for refinancing. Eligible borrowers can refinance up to 100 percent of their home’s estimated value.
