Gustan Cho The Mortgage Expert,
Publish On: June 14, 2021
This article covers VA Cash-Out Mortgage Guidelines On VA Home Loans:
VA loans allow up to a 100% LTV cash-out. However, loan-level pricing adjustments apply on a 100% LTV cash-out refinance VA loan. In this article, we will cover the following:
- Understanding the basics of VA loans
- VA cash-out mortgage guidelines
- Qualifying for a VA loan with a lender with no overlays
VA Loans is the best owner-occupant home loan program in the United States. Not everyone qualifies for VA Mortgages.
Understanding the Basics of VA Loans
VA loans are hands down the best mortgage program in the nation. VA loans do not require any down payment. Lenders allow 100% financing at competitive rates. There is no maximum loan limit on VA loans. There is no mortgage insurance premium requirement on VA loans. However, only active and/or retired members of the United States Military are eligible to qualify on VA loans.
VA Eligibility Requirements and Guidelines
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 as 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 VA Agency 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 without a loan level pricing adjustment. 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). Cash-out refinance require full income docs and a new appraisal.
Gustan Cho Associates is a five-star national VA Lender with no overlays.
Benefits of VA Cash-Out Refinance Mortgage 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
The VA mandate all existing liens on the property be cleared to qualify for VA loans.
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 a lender with No Lender 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. We just go off minimum VA Agency Guidelines. Borrowers who need to qualify for VA Loans with a lender licensed in multiple states with no overlays, please contact us at Gustan Cho Associates Mortgage Group at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.
