How VA Home Refinancing Works
Perhaps you are wondering what is a VA home refinancing. Perhaps you have heard of it but are wondering if it is right for you. Is there an easier and faster way to refinance your home and get a better loan than a VA home refinance.
First, let’s clarify that a VA Refinance isn’t really a “borrowing” of any mortgage at all. It isn’t borrowing against the equity in your home. The refinance process isn’t actually doing anything to your loan except to change the type of loan you have which is usually called a variable rate loan.
VA Home Refinancing is a whole new loan that offers better rates and terms than the current loan you have, but not exactly the same type of loan. You get a loan with a lower interest rate and a lower payment from legitimate VA home lone lender.
What is the difference between a VA Refinance and an actual loan? Well, a VA Refinance is the same as a Traditional mortgage, but with many differences as well.
First, you can’t consolidate the VA Refinance into your home. This means that if you have a loan from a financial institution like a mortgage lender, you can’t use this loan to consolidate. This is a typical downside of a home refinance.
You also have to pay a different fee for this refinancing than you would for a regular mortgage. The processing fee that was part of the application process on a traditional loan has been eliminated.
The reason for this fee is to help ensure that your application is processed quickly. It is to make sure that no one gets a better deal than you by not applying for a Traditional mortgage. The interest rate can be lower as well.
In a nutshell, a VA Home Refinancing isn’t a “borrowing” of any mortgage. It is simply a different loan with a lower interest rate and a lower payment.