Refinancing a Veterans Administration loan into another VA loan is one of the easiest types of mortgages to refinance. If you are looking to lower your interest rate, you can get into what is called an interest rate reduction refinance loan, also referred to as an IRRRL.
You can also refinance your 30-year mortgage into one with a shorter term, such as one that is 15 or 20 years in length. Your payment might increase, but with a lower interest rate, the total interest expense you will pay over the life of the new loan could be dramatically lower than if you stay with your current loan.
The VA allows you to increase your loan term in a refinance but only on a limited basis. You could go from a 15-year to a 25-year mortgage, but you would not be able to go from a 15-year loan to a 30-year loan. Generally, the new loan term cannot be longer than the original loan term plus 10 years, not to exceed 30 years plus 32 days.
Another benefit of this type of refinance is the limited paperwork that is required. Many of these refinances require no credit check, no employment check, no asset check and often no appraisal.
The one thing that the VA will check, however, is your mortgage payment history. Ideally, you will have been current on the existing loan for the last 12 months.
Another benefit that you could enjoy from refinancing into another VA mortgage, as opposed to a different type of loan, is a low interest rate. VA mortgage interest rates are typically .25% to .42% lower than other loans.
If you are interested in refinancing your existing VA mortgage, reach out to me to find out your options and what would benefit you most.