VA Cash-Out Refinance Loan

A Cash-Out Refinance Loan may let service members replace their current loan with a new one with different terms.   

Who is eligible for a Cash-Out Refinance Loan?   

The following are requirements for Cash-Out Refinance Loan applicants: 

  • Qualify for a Certificate of Eligibility (COE),  
  • Meet the VA’s and lender’s standards of credit, income, etc., 
  • Live in the home the loan is for.  

What are the advantages of getting a Cash-Out Refinance Loan? 

A Cash-Out Refinance Loan may help service members: 

  • Take out cash from their home equity to use for other expenses such as to pay off debt, tuition, home improvements, etc.,  
  • Refinance a non-VA Home Loan into a VA Home Loan.  

Do I have to make a down payment for a Cash-Out Refinance Loan?  

No. There is no requirement for service members to make a down payment on a Cash-Out Refinance Loan. 

However, the Federal Housing Financing Agency (FHFA), has loan limits for mortgages. Under a Cash-Out Refinance Loan, service members may borrow up to the limit without making a down payment. If they make a down payment, they may be able to borrow more than this amount. Learn about VA Home Loan limits. 

Do I pay closing costs on a Cash-Out Refinance Loan?  

While the VA does not decide most of the closing cost fees, here are examples of closing costs service members (buyer) may have to pay 

  • VA funding fee 
  • Loan origination fee 
  • Loan discount points or funds for temporary “buydowns” 
  • Credit report and payment of any credit balances or judgments 
  • VA appraisal fee 
  • Hazard insurance and real estate taxes 
  • State and local taxes 
  • Title insurance 
  • Recording fee 

How do I get a Cash-Out Refinance Loan?   

1. Find a lender 

Service members will need to find a private bank, mortgage company, or credit union to get a Cash-Out Refinance Loan. The terms and fees will vary, it is recommended to contact several lenders. 

Learn more on how to spot misleading refinance offers 

2. Request a Certificate of Eligibility 

Service members should be able to use their original Certificate of Eligibility from their first VA Home Loan to show their lender. For service members that cannot find their COE, they may request the lender to get their COE electronically through the VA Home Loan program portal.   

Service members who are applying for the first time for a VA Home loan will have to apply for a Certificate of Eligibility.  

3. Gather necessary documents for the lender and the VA. 

Lenders will also need: 

  • Copies of paycheck stubs for the most recent 30-day period, 
  • W-2 forms for the previous 2 years, 
  • A copy of your federal income tax returns for the previous 2 years (required by many, but not all lenders), and 
  • Any other information the lender requires. 

4. Follow the lender’s process for closing the Cash-Out Refinance Loan and pay closing costs.    

Service members may need to pay a VA funding fee to close on the loan. Their lender will also charge interest on the loan in addition to closing costs.   

Where can I learn more about VA Home Loans? 

The VA’s Home Loan page has dedicated information, resources, and guidance for how to get and use a VA Home Loan.  

More in-depth details and information can be found in the VA Home Loan Guaranty Buyer’s Guide. 

This website has been prepared for general information purposes only. The information on this website is not legal advice. Legal advice is dependent upon the specific circumstances of each situation. Also, the law may vary from state-to-state or county-to-county, so that some information in this website may not be correct for your situation. Finally, the information contained on this website is not guaranteed to be up to date. Therefore, the information contained in this website cannot replace the advice of competent legal counsel licensed in your jurisdiction.

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