Cash-Out Refinances
Take advantage of the equity you’ve built in your home by replacing your existing home loan with a new mortgage, rate, and cash in your pocket.
What is a Cash-Out Refinance?
A cash-out refinance replaces your current mortgage with a larger loan and pays you in cash the difference between the amount borrowed and what you own on your home. The cash can be used for any purpose like home remodeling, debt consolidation, or general financial goals.
Benefits of a Cash-Out Refinance
Depending on the equity in your current home, cash-out refinances help improve your mortgage’s loan terms and provide cash-in-hand. Here are a few additional benefits:
- Lock in a lower interest rate
- Shorten the loan term or change your loan program depending on your needs
- Use the cash funds for any purpose without restrictions
- Improve your credit score if your credit utilization decreases
- Receive tax deductions if you use the funds for home improvements and meet the IRS eligibility requirements
Get Approved for a Cash Out Loan
Relaxed qualifying standards
Option for no down payment
Option for no closing costs
Help available for getting Certificate of Eligibility
Qualifying for a Cash-Out Refinance
In order to get a cash-out refinance, you need to meet your lender’s requirements and qualifications, such as:
- A credit score of 620+
- A debt-to-income ratio of 45% or lower
- At least 20% equity in your home (paid off 20% of the current appraised value of your home)
- Meet the seasoning requirements of your current loan program, which will range from 6-12 months
Is a VA Loan Right for You?
These answers to home buyer’s commonly asked questions may help guide you. To take the next step, our loan officers can help you choose the most affordable loan for your home.
Am I eligible for a VA Loan?
VA loan eligibility is service-based. Some contributing factors taken into consideration include:
- Your service status, e.g., active duty, separation
- Your years of service, and
- Your service record
The VA provides detailed eligibility guidelines outlining who qualifies for veteran’s benefits. You may meet eligibility requirements if you are:
- A current active duty military service member,
- A military veteran, or
- The spouse (including surviving spouse) of a service member
Eligibility is proven through a Certificate of Eligibility (CoE) from the U.S. Department of Veterans Affairs. It’s not required to apply for a loan but will be needed before approval. We can help you apply for a CoE or you can apply for it directly through the VA’s benefits portal online or by mail.
How much does the VA funding fee cost?
The amount of the one-time VA funding fee varies depending on your situation, such as your down payment amount and whether this is your first VA loan. For a VA purchase loan, the fee can range between 1.4% to 3.6% of your loan’s value. If you choose to later refinance your VA mortgage, the VA Interest Rate Reduction Refinance Loan has a fee of only 0.5%.
There are exceptions to paying the funding fee, including Purple Heart recipients, certain surviving spouses of veterans, and veterans with service-related disabilities. It can also be paid upfront or rolled into your loan to be paid over time.
Can I use VA benefits to purchase a home more than once?
You’ve earned these VA mortgage benefits and they are available to you as long as you meet the eligibility criteria. You may qualify for a VA loan for your first home purchase and may then qualify again for each home you buy in the future.
You can even use your CoE to qualify for two VA mortgage loans at one time. Your full eligibility is completely restored after a VA loan is paid off or sold.
There are also convenient and affordable options to refinance a current VA loan to help make your home expenses more affordable by getting a lower interest rate or adjusting mortgage terms.
What are the minimum property standards a home must meet for a VA loan?
The VA sets minimum property standards that each home must meet to ensure that the property is a good investment for the home buyer, the lender, and the VA. To determine if a home meets these standards, an inspection will be required.
These standards ensure that the home is safe, structurally sound, and sanitary
Factors considered could include the condition of a house’s roof, electrical, and heating, for example, but do not include cosmetic features.
Is there a maximum amount I can borrow with a VA loan?
The VA does not have a specified loan limit. At River City, you can borrow as much as you can otherwise qualify to purchase. If you would prefer the option for no down payment, the maximum loan amount for 100% in most areas is up to $548,250. You could potentially borrow more with no money down in a higher-cost area.
