VA Refinance Programs in Pennsylvania: Know Your Options
VA Refinances in Pennsylvania and the rest of the nation have a few basic rules depending on the refinance goals of the Veteran. The VA classifies refinances in two different ways. If the Veteran is paying off their current VA mortgage and nothing else, their best option is the VA IRRRL program. Any other type of VA refinance is classified by the VA as a cash out refinance and subject to the VA Cash Out guidelines listed below.
Let's start by breaking down the differences in VA Refinance options...
VA Interest Rate Reduction Refinance Loans, also known as the VA IRRRL , allow a Veteran to do what the name describes; Reduce the Interest Rate on their current VA mortgage. Sometimes referred to as a VA Streamline refinance, VA IRRRLs are only for the paying off of another VA mortgage, no other debts can be paid with this program.
VA INTEREST RATE REDUCTION REFINANCE LOAN HIGHLIGHTS
No appraisal required
Can only be used to payoff another VA mortgage; can not pay off other debts, other mortgages or receive cash
Property does not need to currently be a primary residence
More limited documentation than a standard refinance
100% Financing with no mortgage insurance
Can be used to change a VA Adjustable Rate Mortgage to a Fixed Mortgage
VA Allowable Closing Costs can be financed into new loan balance
VA Funding Fee limited to .5%
If a Veteran does wish to include other debts, non-VA mortgages or receive additional cash at closing, they do have the option of refinancing under the VA Cash Out Refinance program. Below are the programs available that most closely resembles the base VA guidelines for maximum loan to value under the VA Cash Out Refinance guidelines...
VA CASH OUT REFINANCE OPTIONS
VA Cash Out up 100% of the Appraised Value
Payoff of any mortgages on property only
Payoffs of any non-mortgage debt not allowed
Cash not allowed at closing
VA Cash Out up to 95% of the Appraised Value
Payoff of mortgages on property
Payoff of non-mortgage debt allowed
Cash allowed at closing