| Having your own home is a great financial asset. | | | | different from other kinds of VA loans. For |
| This fact is not lost on banks and other financial | | | | example, when you first got your VA home loan, |
| institutions who tailor their products and services | | | | you had to certify that you will occupy the home. |
| to their markets. Getting a home equity loan | | | | For an IRRRL you only need to certify that you |
| make use of your home's equity as collateral.To | | | | occupied it previously.If you are looking to |
| understand better how this kind of loan works, | | | | refinance and receive cash back to help pay for |
| equity is computed as the difference between the | | | | other expenses, you may want to consider the |
| value of the home less the amount owed on the | | | | cash-out refinance. You will have to qualify based |
| mortgage.The maximum amount of money that | | | | on income and credit and your home must have |
| can be borrowed is either fixed or determined | | | | sufficient equity. In addition, the property must be |
| using other factors like the borrower's credit | | | | your primary residence and an appraisal is |
| history, income, and the appraised value of the | | | | required.The amount of money received from the |
| house, among others.Understand that the loan is | | | | new loan exceeds what is needed to pay off the |
| secured by the property. This means it is | | | | liens, including the first mortgage, may be taken |
| considered collateral and it is being used to | | | | as cash by the borrower for any purpose |
| guarantee the loan. This also means the borrower | | | | acceptable to the lender. There are fees but |
| is putting perhaps his most valuable asset at risk | | | | these can be included in the new loan.The DVA |
| of foreclosure when the monthly payments on | | | | Federal Credit Union offers both savings products |
| the loan can not be made anymore.While the | | | | and loan products. They have an attractive home |
| Department of Veterans Affairs does not lend | | | | equity loan terms aside from this being a tax |
| directly, it does provide significant benefits and | | | | deductible loan. Though mainly for DVA |
| advantages to veterans who are getting a home | | | | employees, if you are a Compensated Work |
| loan from a lending institution. A bank or lender | | | | Therapy Program Veteran participant, or under |
| provides loans with less restrictive guidelines in | | | | the employ of certain veterans' organizations, you |
| return for a guarantee from the DVA against | | | | are eligible to join.In addition to the federal |
| default and a fee for this guarantee is paid by the | | | | benefits given by the DVA, there may also be |
| veteran who is applying for the loan.For veterans | | | | state benefits for veterans and their dependents. |
| who already have a VA home loan and are | | | | For example, the California Department of |
| considering refinancing, you can do so with the | | | | Veterans Affairs offers CalVet Loans for buying |
| VA's loan program named the IRRRL (Interest | | | | a home with below market interest rates and |
| Rate Reduction Refinance Loan) or Streamline | | | | either low or no down payment. Veterans who |
| Refinance. This loan offers a means for current | | | | already have a CalVet loan can approach a bank |
| VA homeowners to lower their interest rates. | | | | for a home equity loan provided you and the |
| The only cost required by VA is a funding fee of | | | | lender submit a Consent to Encumber form. To |
| one-half of one percent of the loan amount which | | | | find out more, it is best to talk to a veterans |
| may be paid in cash or included in the loan. This | | | | benefits counselor in your state.There are also |
| loan is available only to veterans who are | | | | banks and loans companies who specialize in |
| refinancing their original mortgage.The IRRRL is a | | | | providing loan products geared towards the |
| great financial tool in achieving a goal of a lower | | | | financing needs of active duty military and |
| interest rate. However, it is understood that you | | | | veterans. To play safe, check the reputation of |
| cannot receive any cash from the loan proceeds. | | | | the establishment first and consult with the |
| You are encouraged to contact several reputable | | | | veterans affairs office in your location.John G. |
| banks or lenders since there are likely to be | | | | Edwards is a consultant that has helped many |
| significant differences in their loan terms.There is | | | | people with their finances. |
| an occupancy requirement for an IRRRL but it is | | | | |