Kentucky VA Mortgage Refinance Guidelines
Kentucky VA loans may be used to replace an existing mortgage, called “refinancing.” A KY VA refinance may be used to reduce an existing interest rate, change loan terms or a combination of both. The most common reason to refinance is to lower the monthly payment. A borrower may take out a KY VA loan then later see that interest rates have fallen and are lower than an existing rate. By refinancing, the borrower can replace the old loan with a new one to obtain the lower rate and subsequent lower mortgage payment.
A refinance can also make sense when changing loan terms such as switching from an adjustable rate mortgage to a fixed rate or adjusting the term of the loan to save on interest charges.
The Interest Rate Reduction Refinance Loan, or IRRRL is commonly referred to as the Kentucky Mortgage Refinance VA “streamline” refinance program. This is a special VA loan to VA loan refinance that requires very little documentation to obtain an approval. Some of the features of the VA streamline are:
• No appraisal needed
• Income or employment is not verified
• No credit review
• Closing costs may be rolled into the loan amount
As long as you’re reducing your current mortgage payment, not taking any cash out or switching from an adjustable rate mortgage to a fixed rate loan, you may qualify for this unique program and you don’t have to use your existing Kentucky VA lender in order to benefit from the Kentucky VA streamline mortgage.
Cash Out VA loan Refinance
Cash out refinance loans allow the borrower to pull out equity in the home in the form of cash during the course of a refinance. While the VA doesn’t establish a maximum loan amount, most VA lenders do place limits on the loan based upon the current value of the property and the final loan amount. Lenders may limit any cash out loan to 80 or 90 percent of the property’s current value. If taking cash out of your home is needed and you have sufficient equity in your home, it may be better to obtain a home equity loan or refinance into a conventional mortgage.
Senior Loan Officer