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The maximum loan amount for a VA cash-out refinance loan is 100% of the appraised value.
A VA cash-out refinance loan is a VA-guaranteed loan that refinances any type of lien or liens against the secured property. The liens to be paid off may be:
Feature | Streamline Refinancing | Cash-out Refinancing |
---|---|---|
Cash-out Refinancing | To refinance an existing VA loan at a lower interest rate | To pay off lien(s) of any type – can also provide cash to borrower |
Interest Rate | Rate must be lower than on existing VA loan (unless existing loan is an ARM) | Any negotiated rate |
Monthly Payment Amount | Payment must be lower than that on an existing VA loan (unless the ARM is being refinanced, a term is shortened, or energy efficiency improvements are being included) | No requirement |
Discount Points | Reasonable points can be paid – only two of these points can be included in the loan amount | Reasonable points can be paid – if paid from loan proceeds |
Maximum Loan | Existing VA loan balance, plus allowable fees and charges, plus up to two discount points, plus the cost of any energy efficiency improvements, plus the VA funding fee | 100 percent of the reasonable value of the property indicated on the NOV, plus the cost of any energy efficiency improvements, plus the VA funding fee |
Entitlement | Veteran re-uses the entitlement used on the existing VA loan – the refinance does not impact the amount of entitlement the veteran has in use | Must have sufficient available entitlement – if existing VA loan on the same property is being refinanced, entitlement can be restored for the refinance |
Fees and Charges in the Loan | All allowable fees and charges, including up to two discount points, may be included in the loan | Allowable fees and charges and points may be paid from the loan proceeds |
Cash to Borrower | Not permitted | Borrower can receive cash for any purposes acceptable to the lender |
Lien/Owner-ship | Must be secured by first lien – veteran must own property | Must be secured by first lien – veteran must own property |
Refinance of Other Liens | Cannot refinance other liens – can only refinance the existing VA loan | Can refinance any type of lien(s) |
Maximum Loan Term | Existing VA loan term plus 10 years, not to exceed 30 years + 32 days | 30 years + 32 days |
Occupancy | Veteran or spouse of an active duty servicemember must certify to prior occupancy | Veteran or spouse of an active duty servicemember must certify as to intent to occupy |
Appraisal | None | Appraisal is required |
Credit Underwriting | Credit report will be required | Full credit information and underwriting are always required |