Why Refinance Now?
In general, VA Loan rates are lower than that of a conventional loan. Many people, seeing the economy the way that it is starting to shop and wonder if the rates are going to keep dropping. The question has been asked various times if now is the best time to refinance. After having been in the business for many years and having dealt with only VA Loans, I would say yes, now is the time to refinance a VA loan.
The VA Streamline refinance is a very simple process and only takes us about 3-4 weeks to close. If you are wondering what a refinance at this time can do for you here is a list of four great things a VA Refinance can do for you:
Lower your monthly payment
The rates on a VA Loan are as low as ever depending on loan size and state we can get our Veterans or Active Military rates as low as 3%. Simply exchanging a higher interest rate for a lower one could reduce your monthly mortgage payment by hundreds of dollars. If you decide not to refinance the savings that you could have will just go into the banks pocket instead of your own.
Stabilize your mortgage rate
If you already have an adjustable rate mortgage and your initial interest rate period is about to end, you can refinance to a fixed-rate that may save you money over time. The interest rate on an adjustable-rate mortgage can keep climbing. A fixed-rate loan takes the guesswork out of budgeting, giving more peace of mind that your payment will never go up.
More cash in your pocket
You can get funds by doing a cash-out refinancing, where you can draw on your home’s equity by borrowing more than you currently owe. It can be cheaper than taking a home equity loan or second mortgage, which generally carry higher interest rates. With the VA Streamline refinance you are also able to defer 2 monthly payments after it’s closed, as well as receive the amount in your escrow account back.
If you have enough equity in your home to cover your other debts, refinancing to get the cash may work to your advantage. With the money that you save from the 2 deferred payments, you will also be able to pay off credit cards or other debt that has higher interest rates. You will be able to become debt free and save hundreds of dollars that you would have paid in interest otherwise.