Thinking of Refinancing with a VA loan?
The VA loan allows you to refinance your loan at a lower/different interest rate at any time throughout the life of your loan. If you own a home, and especially if you own a home with the help of a VA loan, chances are you receive weekly, if not daily, solicitations on refinance programs promising outrageously low payments. While it's true that rates are still historically low, if something sounds too good to be true, it probably is.
Here are some tips to remember if you are thinking about refinancing:
- You don’t have to respond to the marketing – Though an ad may sound or look official, you don’t have to refinance your home unless you decide it’s in your best interest. Take a look at how long you will pay the new loan, and whether the interest rate will change, not just at the monthly payment.
- Be a savvy consumer – look at everything an advertiser has to say about the product they’re selling. Many times, specific terms and conditions are hidden in the advertisement.
- Understand the risks – not every ad directed towards your military status is a guarantee. You may not always qualify for the rates and terms that the advertisement lists. Before applying, ask your lender upfront about all the qualifications required and understand what you need to meet before you can finalize the process.
- Remember to shop around – within a limited time (14-45 days), you can shop around for a mortgage and it will be counted as a single inquiry affecting your credit score.Don’t limit your lender choices just because your credit has already been pulled by one lender. The impact of an inquiry is small, while shopping around for the best deal can potentially save you a lot of money in the long run.
- Know the process – the Department of Veteran Affairs is here to help you with financing your home. Learn what to expect and what questions to ask. There are tools and resources to help you make decisions, such as our Owning a Home tool.
- Talk to a trusted professional - whether it's your realtor or your loan officer, and they will be able to guide you by providing you with facts.
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