Loan Types

• VA guarantees both fixed rate and Adjustable-Rate Mortgages (ARMs). The veteran wishing to refinance his mortgage may choose a 15- or 30-year fixed rate mortgage or obtain an ARM. Typically, fixed-rate mortgages require higher interest rates than ARMs but provide more long-term payment security since the principle and interest payment never change. ARMs provide lower initial interest rates but are subject to payment and interest rate fluctuations during the life of a loan.
  
  

Standard Refinances

• VA offers both rate and term refinances and cash-out refinances to eligible veterans. Both loan program types allow the borrower to change the interest rate or loan type as well as move between different amortization periods. Rate and term refinance mortgages allow the veteran to include up to $6,000 of energy efficient improvements in to the mortgage, but limits the amount of cash the borrower may receive directly. Cash-out refinance mortgages allow the borrower to access the equity built up in the home up to 90 percent of the home's value.
  
  

IRRRL

• VA's Interest Rate Reduction Refinance Loan (IRRRL) allows veterans who currently hold an existing VA mortgage to refinance into another mortgage without obtaining an appraisal or proving their ability to repay the mortgage. Veterans refinancing with an IRRRL must improve their lending situation either through moving into a more conservative loan type or lowering their interest rate and payment. Veterans may finance up to $6,000 of energy efficient improvements into the IRRRL but cannot receive more than $500 cash back to closing.
  
  

Required Documents

• Most people do not have access to VA's guaranteed home loans. VA only offers these loans to eligible veterans and their spouses. To qualify a veteran must provide her DD214 discharge paperwork and a certificate of eligibility from VA. Additionally, simply being a veteran is not enough to qualify for a VA loan. The borrower must prove his ability to repay the mortgage and have a sufficient credit history. Qualifying for most refinance programs, other than the IRRRL, require the veteran fully document her credit worthiness.