As a Veteran is it the Right Time to Refinance My Home?
The interest rates have gradually come down in the past several months and many people are rushing to refinance their adjustable rate mortgage into a fixed rate mortgage or are looking to save a little money on lower monthly payments. Each homeowner must ask themselves, “How much does refinancing our home really cost?” Unfortunately most people do not realize the cost of refinancing. The long term savings of a lowered interest rate far exceed the nominal fees at refinancing, however, these costs are important to understand before arriving at the closing table.
A special program has been devised for Veterans, called Veterans loans, or more commonly referred to “VA loans”. Unfortunately, many Veterans and their families do not realize the benefits they are afforded in this loan type. The VA loans are under utilized by most military families, as a result of widespread miscommunication about who is eligible for a VA loan.
One of the common misconceptions is that you can only use your benefit once. This is untrue! As a Veteran you can only have one VA designated loan at a time; however you can have as many subsequent VA loans as you chose. The other misconception is that only full time active service military members are eligible for a VA loan. This too is incorrect. Not only are active members eligible but also, retired personnel, reservists, National Guard Members, time served and retired military members can use this benefit.
The VA loan can be used to purchase a new home with no money down and no monthly Private Mortgage Insurance. Or the VA loan can be used to refinance either a current VA loan or another loan. Moreover, the new VA loan can also assist with debt consolidation up to 95% loan to value.
Most of the details regarding the type of mortgage you choose, i.e., the interest rate and the term of the loan, are decisions for you and your mortgage broker to discuss. However, it is your attorney who will be reviewing the costs on the Statement of Settlement and associated legal issues.