VA Refinance
VA Cash-Out Refinance
Tap your home equity using your VA benefit. Eligible veterans and service members can refinance up to 90% of home value with no monthly PMI, even if your current mortgage is not a VA loan. We help you decide if the math works and walk you through every step.
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How It Works
What You Need to Know About a VA Cash-Out Refinance
A VA cash-out refinance lets eligible veterans and service members turn home equity into usable cash while still benefiting from VA loan terms. It works whether your current loan is a VA loan or not, which makes it one of the most flexible refinance tools the VA program offers.
1
Review Your Equity and Goals
You and your loan officer look at your current home value, the balance on your existing mortgage, and how much cash you want to take out. We make sure the math lines up with what you actually need the money for.
2
Confirm VA Eligibility and Pull Your COE
We verify your VA entitlement and help you pull your Certificate of Eligibility if you do not already have one. Your current mortgage does not need to be a VA loan to qualify, so this works for FHA and conventional borrowers too.
3
Order Your Appraisal
Unlike the VA IRRRL, a cash-out refinance requires a full VA appraisal so we know the current market value of the home and how much equity is available to tap.
4
Compare Cash-Out Scenarios
We walk through how much cash you can pull at different loan-to-value points, what each option does to your monthly payment, and how the VA funding fee factors in so you can pick the version that fits your goals.
5
Lock Your Rate and Complete Underwriting
You lock your rate and complete a full documentation underwriting package with income, credit, and asset verification. We coordinate the file so it moves through underwriting cleanly the first time.
6
Close and Receive Your Funds
At closing you sign the new VA loan documents, your existing mortgage is paid off, and the cash portion is disbursed to you within a few business days after the rescission period ends.
Basic Eligibility Requirements
Entitlement: Active VA loan entitlement and a current COE
Occupancy: Primary residence in most cases
Credit Score: No VA minimum, lenders typically require 580 to 620
Equity: Enough remaining equity to support the new loan amount
Debt to Income: Reviewed with VA residual income guidelines
Property: Must meet VA minimum property requirements
Documentation: Full income, credit, and asset verification
Location: Texas, Florida, Minnesota, Colorado
Pros and Cons
Is a VA Cash-Out Refinance Right for You?
A VA cash-out refinance can be a smart way to use the equity you have built, but it is not the right move in every situation. Here are the key advantages and tradeoffs to weigh before you decide.
The Advantages
- Refinance up to 90% of your home value in most cases, often more than a conventional cash-out allows.
- No private mortgage insurance even at higher loan-to-value ratios.
- Works even if your current loan is not a VA loan, so FHA and conventional borrowers can convert to a VA loan and tap equity in one step.
- Competitive VA-backed rates and the option to roll the funding fee into the loan rather than pay it upfront.
- Cash can be used for any purpose, including debt consolidation, home improvement, education, or a major expense.
The Tradeoffs
- Full VA appraisal and full documentation underwriting are required, so the process is not as streamlined as a VA IRRRL.
- The VA funding fee on a cash-out refinance is higher than on an IRRRL, typically 2.15% for first use and 3.3% for subsequent use unless you are exempt.
- Refinancing resets your loan term, so you may extend the timeline before your home is paid off.
- Closing costs are real and need to be factored into the math when deciding whether tapping equity makes sense.
- Equity you pull out is borrowed money. You will pay it back over time with interest, so it should fund something that justifies the long-term cost.
Who It's Best For
VA Cash-Out Works Best For...
VA cash-out refinances are built for veterans and service members who have meaningful equity and a specific purpose for the funds, whether that is paying down high-cost debt, improving the home, or converting a non-VA loan into a VA loan.
Veterans Consolidating High-Interest Debt
Homeowners with significant equity who want to roll high-interest credit card or personal loan balances into a single lower-rate mortgage payment.
Veterans Funding Major Home Improvements
Borrowers planning a renovation, addition, or other large home project who want to use existing equity instead of taking on a separate construction or home equity loan.
Veterans Converting a Non-VA Loan
Homeowners with an FHA or conventional mortgage who are now eligible for a VA loan and want to refinance into a VA loan while also tapping equity in one transaction.
Common Questions
Frequently Asked Questions
Straight answers to the questions we hear most often.
What is a VA cash-out refinance?
A VA cash-out refinance is a refinance loan backed by the Department of Veterans Affairs that lets eligible veterans and service members pay off their current mortgage and take additional cash out of their home equity at closing. The cash can be used for any purpose.
How much of my equity can I actually tap?
In most cases, VA cash-out refinances allow you to refinance up to 90% of your home value. In some scenarios, the VA itself permits up to 100% LTV, though many lenders set their own caps below that. The exact amount depends on your appraisal, credit profile, and lender overlays. Higher loan-to-value scenarios usually mean a higher funding fee and tighter qualification standards.
Can I use a VA cash-out if my current loan is not a VA loan?
Yes. One of the most powerful features of the VA cash-out program is that it works even if your current mortgage is FHA, USDA, or conventional. You can convert your existing loan into a VA loan and pull equity in the same transaction, as long as you have VA entitlement available.
How is this different from a VA IRRRL?
A VA IRRRL is a streamlined rate-and-term refinance that does not allow cash out and is only available if your current loan is already a VA loan. A VA cash-out refinance allows you to take cash from your equity, works for non-VA loans too, and requires a full appraisal and full documentation underwriting. The funding fee is also higher on a cash-out.
What costs and fees are involved?
A VA cash-out refinance includes standard closing costs and a VA funding fee, typically 2.15% of the loan amount for first-time VA loan use and 3.3% for subsequent use. The funding fee can usually be rolled into the loan. Veterans with a service-connected disability rating are generally exempt from the funding fee.
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