VA cash-out refinance
Turn the equity in your home into cash, or move a non-VA loan into a VA loan.
What it is
A VA cash-out refinance replaces your current mortgage with a new VA-backed loan for more than you owe, and you keep the difference as cash. People use it to pay off debt, pay for school or make repairs. It can also turn a non-VA loan into a VA loan. You get it through a private lender.
Who qualifies
- You qualify for a VA-backed home loan Certificate of Eligibility (COE).
- You meet VA and lender standards for credit and income.
- You will live in the home you are refinancing.
How much you can borrow
VA's cash-out refinance page says you can borrow up to the Fannie Mae and Freddie Mac conforming loan limit with no down payment, and higher in some high-cost counties. You can borrow more with a down payment. VA says its limits match the Federal Housing Finance Agency county limits, so look up your county on the FHFA site for this year's number. VA's loan-limits page also says a Veteran with full entitlement has no VA loan limit, and the lender decides how much to approve. Your lender still has to approve the amount.
What it costs
- VA funding fee for a cash-out refinance (VA fee table effective 7 April 2023): 2.15 percent for first use, 3.3 percent for later use.
- Some people owe no funding fee. The full exemption list is in Question 10 at vsgsolutions.org/va-home-loan-faq.
- Lender closing costs and interest.
VA funding fee for a cash-out refinance
How to get it, step by step
- Find a private lender (bank, mortgage company or credit union).
- Request your COE from VA, or let the lender get it.
- Give the lender your last 30 days of pay stubs, W-2s for the past 2 years, and often federal tax returns for the past 2 years.
- The lender orders an appraisal of the home.
- Close the loan and pay closing costs.
Traps to avoid
- You are borrowing against your home. Cash taken out is added to the loan you repay with interest.
- Lender closing costs and interest are on top of the funding fee. Ask several lenders for their numbers.
Where to call and where to go
Phone
- 877-827-3702 (TTY: 711), Monday through Friday, 8:00 a.m. to 6:00 p.m. ET. Source: VA Home Loans contact page
- Veterans Crisis Line, 24/7: 988, then press 1. Source: Helpful VA phone numbers
Official pages