VA Cash-Out Mortgage Guidelines On VA Home Loans


This BLOG On VA Cash-Out Mortgage Guidelines On VA Home Loans Was PUBLISHED On January 9th, 2020

What are VA's mortgage payment guidelines regarding VA home loans?

VA Loans is the best owner occupant home loan program in the United States. Not everyone qualifies for VA Mortgages.

  • Borrowers need to be active and/or retired members of the U.S. Armed Services with a valid Certificate of Eligibility
  • Certificate of Eligibility is often referred to COE
  • The federal government created and launched VA Loans as a reward for our men and women in uniform to purchase homes with 100% financing with lenient and lax lending requirements
  • Under 2019 VA Cash-Out Mortgage Guidelines, homeowners can qualify for 100% VA Cash-Out Refinance Mortgages

However, on February 15th, 2019, new VA Cash-Out Mortgage Guidelines came into effect. With the exception of IRRRL’s, VA Cash-Out Refinance Guidelines state that new VA Loans cannot exceed 100% LTV. This includes the VA Funding Fee. Any overages over 100% Loan-To-Value needs to be paid by borrowers.

VA Cash-Out Mortgage Guidelines And Requirements 

Under VA Cash-Out Mortgage Guidelines, homeowners can have any type of mortgage or no mortgage on their current home loan to refinance into a VA Cash-Out Refinance.

  • Cash-Out refinance is not the VA Streamline Refinance (IRRRL)
  • It is a full new mortgage where a home appraisal is required

Gustan Cho Associates is a five-star national VA Lender with no overlays. 

Benefits Of VA Cash-Out Refinance Mortgage For Homeowners

What are the benefits of VA Cash-Out Mortgage Refinancing for Homeowners

VA Loans is the only loan program that allows 100% LTV Cash-Out.

  • This is because of the government guarantee by the Department of Veterans Affairs
  • Qualified homeowners can get cash-out on VA Loans with no equity in their homes
  • As long as the 100% Loan-To-Value of the appraised value, they can get cash-out
  • Homeowners can refinance an existing VA, FHA, USDA, and/or Conventional Loan with a new VA Cash-Out Refinance Mortgage

Cash-Out Refinance loans are not VA Interest Rate Reduction Refinancing Loans. It is a full credit/income with the appraisal mortgage process.

VA Cash-Out Mortgage Process

All existing liens on the property get paid off with the new VA Loan.

  • This includes first and second mortgages
  • Any leftover proceeds will go to the borrower
  • Homeowners are allowed to qualify for VA cash-out mortgages on assumed properties
  • As long as homeowners have title to the property, borrowers can refinance an assumed mortgage

Homeowners with a second mortgage can pay off the second lien with the new cash-out mortgage. Cannot exceed 100% loan-to-value.

Qualifying For VA Loans With Direct Lender With No Overlays

How to qualify for VA loans with a direct lender without overlays

The Department of Veterans Affairs has no minimum credit score requirements on VA Loans. VA also does not have any debt to income ratio caps on VA Loans. Many lenders require a 620 to 640 credit score on VA Loans are because they have lender overlays. All lenders need to meet minimum VA Agency Guidelines. However, the lender can institute additional lending guidelines and policies requiring higher lending standards. Gustan Cho Associates is a national lender with no overlays on VA Loans. We just go off minimum VA Agency Guidelines. Borrowers who need to qualify for VA Loans with a direct lender with no overlays, please contact us at Gustan Cho Associates Mortgage Group at 262-716-8151 or text us for faster response. Or email us at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

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