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NEWDAY USA 100 VA CASH OUT
VA Cash Out Refinance
A VA Cash Out refinance lets Veterans get cash out by using the equity built up in their homes.
Veterans often choose to use this cash to:
Consolidate DebtIncluding high-interest loans such as personal loans (“debt consolidation”*)
Pay off Your CarGet a fresh start with a completely paid off car, while getting rid of high-interest debt by paying off the loan!*
Prepare for RetirementPut cash into your retirement savings now, and get your money working for you
Consolidate DebtIncluding high-interest loans such as personal loans (“debt consolidation”*)
Pay off Your CarGet a fresh start with a completely paid off car, while getting rid of high-interest debt by paying off the loan!*
Prepare for RetirementPut cash into your retirement savings now, and get your money working for you
*Consolidating debts may increase repayment time and total finance charges may be higher over the life of the loan.
What is a VA Cash Out Refinance?
With a VA Cash Out Refinance, Veterans can refinance their mortgage, taking the difference between the value of their home and their current mortgage balance as cash out.
This is important because it provides financial options that may not have been otherwise available. For example, this cash out can be used to pay off high-interest loans resulting in unmanageable monthly payments*. Here we explain the VA Cash Out Refinance process, requirements, pros and cons, and how to use a VA refinance calculator.
*Consolidating debts may increase repayment time and total finance charges may be higher over the life of the loan.
How Does VA Cash Out Refinance Work?
Let's take a look at John, a Veteran, to demonstrate how VA Cash Out Refinance works in practice:
| John's Home Details | Value |
|---|---|
| Purchase Price 10 Years Ago | $200,000 |
| Current Market Value | $300,000 |
| Remaining Mortgage Balance | $150,000 |
| Equity Available for Cash Out | $150,000 |
Now with our VA Cash Out loan, John can access $150,000 of his home equity
without having to sell it.
This is how the process works:
Apply for VA Cash Out Refinance
A friendly NewDay USA expert walks you through the process.
Home Appraisal
An independent expert decides the current market value of your home.
Measure Equity
This is the market value of your home less the mortgage you still owe.
Receive Cash Out
Once you close, you can access the value you’ve built up in your home as cash out. Use this cash out to accomplish your goals.
Apply for VA Cash Out Refinance
A friendly NewDay USA expert walks you through the process.
Home Appraisal
An independent expert decides the current market value of your home.
Measure Equity
This is the market value of your home less the mortgage you still owe.
Receive Cash Out
Once you close, you can access the value you’ve built up in your home as cash out. Use this cash out to accomplish your goals.
Important Considerations
This example simplifies the process to provide a clear understanding of how VA Cash Out Refinance works. Veterans should always consult with a financial advisor to understand the specific terms and implications of their unique situation.
Interest Rates
John should consider the interest rates and terms of the new mortgage compared to his current one.
Closing Costs
There will be closing costs associated with the refinancing process, which John should check.
Long-term Impact
Refinancing can result in more manageable monthly payments, an increased mortgage balance, and higher total interest.
The VA Cash Out Refinance Process
Explanation of Cash Out Refinance Process
- AppraisalYour home is appraised to determine its current market value.
- Equity CalculationThe appraised value less your current mortgage balance.
- New LoanA new loan is issued for more than the existing mortgage balance.
- Cash OutThe difference between the new loan amount and the existing mortgage is given to you in cash out.
Comparison to Traditional Refinance Processes
- Application ProcessLike standard refinancing, it involves applying for a new mortgage, assessing creditworthiness, and completing necessary documentation.
- Property AppraisalBoth processes require an appraisal of the property to determine its current market value.
- Closing CostsJust like other refinancing options, VA Cash Out refinance includes closing costs, which are fees associated with finalizing the new mortgage.
VA Cash Out Refinance involves replacing your current mortgage with a new one for a larger amount than what you owe, allowing you to take the difference in cash out.
Your VA Cash Out Refinance Process Can Start Today!
VA Cash Out Refinance Eligibility Requirements
To be eligible for the NewDay USA 100 VA Cash Out Loan, Veterans should meet certain criteria, including one of the following:
Active duty service member
Veteran with honorable discharge
Surviving spouse of an eligible deceased Veteran
Reservist/National Guard with honorable discharge and sufficient time served
Spouse of a MIA/POW service member
Property type qualifications:
- Single-family detached homes
- Semi-detached homes
- Townhouses
- Row homes
- PUDs (Planned Unit Developments)
- VA-approved condominiums
- 1-2 unit properties
Documents you could need:
- W2s
- Tax returns
- Pay stubs
- Credit history related to mortgages
- Property appraisal
- Verification of U.S. citizenship
- Verification of VA entitlement
- Employment history or retirement income
VA Cash Out Refinance Pros and Cons
There are a number of important things you need to know about VA Cash Out Refinance, and to help you understand these better, we’ve put together some of the pros and cons:
Pros of VA Cash Out Refinance
Flexibility: Veterans can use the cash for a wide range of purposes like home renovations, paying off high-interest debts*, funding education, or investing.
* Consolidating debts may increase repayment time and total finance charges may be higher over the life of the loan
Refinance Advantage: If interest rates have dropped since the original mortgage was taken out, and if it is still relatively early in the life of the loan, VA Cash Out Refinance rates can be lower in some instances, which could potentially reduce the overall interest cost.
Cons of VA Cash Out Refinance
By taking out cash, the overall mortgage balance increases, which can also be increased by closing costs, and more interest may be paid over the life of the loan.
Additional Considerations
1. Equity Reduction:
Cash Out refinancing reduces the equity built up in the home, which can be a significant factor in future financial planning. Speak to a financial planner to help you make these decisions, and advise you on the best course forward.
2. Rates:
While VA loans can offer lower rates, they are subject to market conditions – this means that different lenders offer different rates, and rates float daily until locked in. Importantly, NewDay VA cash out refinances are fixed rate loans, where the rate will not change during repayment.
3. Financial Goals Alignment:
It's crucial for Veterans to assess how this refinancing aligns with their long-term financial goals and whether the immediate benefits outweigh potential future costs. These are big decisions that can have a long-term impact on your finances. Consult an expert financial planner, as every Veteran’s current financial situation – and future goals – are different.
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VA Cash Out Refinance FAQs
The maximum loan amount depends on your home value, available equity, and VA loan entitlement. Generally, with NewDay USA you can borrow up to 100% of your home's value, not 80% like some other offers.
Cash Out refinancing will reduce your VA entitlement by the amount of the loan. This can affect your ability to use VA loan benefits for future home purchases.
Typically, a VA Cash Out refinance can take 30 to 45 days to complete, though this can vary.
You may still be able to turn a non-VA loan into a VA-backed loan. Find out if you’re eligible.
You can receive a loan up to 100% of your home's value, depending on your eligibility and other factors.
Yes, you will need a new appraisal to get a NewDay 100 VA Cash Out loan. However to make it easier for Veterans, in many cases NewDay USA will pay upfront for the appraisal and there will be no out-of-pocket costs to apply. So you will not be charged upfront for the appraisal, and you can choose to pay these fees in your loan amount, or at closing. Note that charges apply if the appraisal is transferred to another lender.
Closing on a VA Cash Out refinance usually takes about 30 to 45 days, similar to the overall refinance process.
At NewDay USA there are no out-of-pocket expenses required to close your loan. In many cases we will pay upfront for the appraisal and inspection fees. All costs and fees, including the appraisal fee, can be financed into the loan. Note that while you are not charged upfront for the appraisal, and that you can choose to pay these fees in the loan amount or at closing, charges will apply if the appraisal is transferred to another lender.
These are not a standard part of VA loans. Equity reserves refer to the portion of equity in your home that is not borrowed against.
Call one of our Veteran Loan Experts now and we’ll see how low we can go for you.
Conclusion: VA Cash Out Refinance Opens Doors
Understanding VA Cash Out Refinance, and how it can provide you with financial options you may otherwise not have had access to, is critical to taking control of your financial future.
We looked at how VA Cash Out Refinance works, what the process looks like, what the requirements are, and how Veterans are using this cash to reach their goals.
To learn more about VA Cash Out Refinance and how it can benefit you, give the experts at NewDay USA a call: 800-405-4187 or click on the "Get Started" button below.