Looking to get some cash by refinancing your VA home loan? A cash out refinance might be exactly what you're in search of. Not only can you take cash out from the equity in your home, you can also lock down a better interest rate.
Is a Cash Out Refinance the Same as a Home Equity Loan?
No. A home equity loan is a second loan on your property. With a cash out refinance, you still only have one loan to pay back. The new loan completely replaces your existing one.
On top of only having one loan, a homeowner doesn't even need to take money out on his own home. You can simply use the cash out refinance to get a lower rate, or to get yourself into a VA loan and remove the PMI (Private Mortgage Insurance) conventional loans require since your new VA loan will be backed by the government.
Cash out refinancing is typically a longer process than streamline refinancing, which does not require a credit check, bank authorization or income verification. However, with a VA streamline refinance, you cannot take out based on equity. Streamline refinancing is designed for veterans and active service members who simply want a better rate and monthly payment on their VA home loan.