Kentucky VA Loan Refinance and Purchase Guidelines


 

How do I refinance using my Kentucky VA Home Loan?

You can use your Kentucky VA home loan benefit to refinance your existing VA home loan to a lower

interest rate, with little or no out-of-pocket cost. This is called an Interest Rate Reduction

Refinancing Loan (IRRRL), also known as a “rapid refinance” or a “streamline refinance.”

Generally, no appraisal, credit information, or underwriting is required for this refinancing

option, although some lenders may require an appraisal and credit report. The fees and

charges associated with the refinancing loan may be incorporated into the new VA loan.

Remember: The interest rate on the new loan must be lower than the rate on the old loan

(unless you refinance an adjustable-rate mortgage to a fixed-rate mortgage).

To receive an IRRRL, work with your lender to process your application. It’s generally a good

idea to compare several lenders’ rates first, as there may be large differences in the terms

they offer. Also, some lenders may contact you suggesting that they are the only lenders

with the authority to make IRRRLs, but according to VA, any lender can

make you an IRRRL.

An IRRRL can be done only if you have already used

your eligibility for a KentuckyVA loan on the property you intend to

refinance. If you have your Certificate of Eligibility, take it

to the lender to show your prior use of the entitlement.

The occupancy requirement for an IRRRL is different from that for

other VA loans. When you originally got your Kentucky  VA loan, you certified

that you occupied or intended to occupy the home. For an IRRRL, you

need only certify that you previously occupied it.

The loan may not exceed the sum of the outstanding balance on the existing VA loan,

plus allowable fees and closing costs, including the funding fee.

What’s the Cash-out Refinance Option?

The Veterans’ Benefits Improvement Act of 2008 allows you to free up cash with a cash-out

refinance, a VA home loan refinance program in which you can cash-out on the equity you

have built up in your home. As an example, if you still owe $70,000 on your original loan, you

can refinance for a $90,000 loan, which gives you a cash-out of $20,000.

An appraisal is required and you must qualify for the loan. If you are refinancing for the first

time, VA charges a 2.15% funding fee for this program (2.15% of the total loan) which can be

rolled into the loan amount. If you refinance more than once, the funding fee is 3.3%.

There is no minimum amount of time that you must own your home, yet your home must have

sufficient equity to qualify for KEntuckyVA refinancing. Existing loans can be refinanced whether they

are in a current or delinquent status, but refinancing loans are subject to the same income

and credit requirements as regular home loans. As long as you have title to the property

you can refinance an assumed loan. Check with your lender as there are some additional

regulations concerning assumed loans.

Conventional to VA Refinance

If you do not have a KentuckyVA home loan but are eligible for one, you can refinance a subprime or

conventional mortgage for up to 100 percent of the value of the property. Usually you will be

charged a funding fee of around 2-3 percent (depending on the lender you choose) if you are

using your VA loan guarantee for the first time. Benefits to this type of refinancing are that

your new interest rate may be lower and you will have no monthly mortgage insurance or outof-

pocket closing costs.

Can I reuse my Kentucky VA Home Loan benefit?

The Kentucky VA  home loan benefit can be reused if you have paid off your priorKentucky VA loan and sold the

property. In addition you may, on a one-time-only basis, be able to reuse or restore your

benefit eligibility if your prior VA loan has been paid in full and you still own the property.

In either case, to restore your eligibility, you must send a completed VA Form 26-1880 to your

VA Eligibility Center. (See VA Loan Documents Checklist Above.)

To prevent delays in processing, you should also include evidence that the prior loan has

been paid in full and, if applicable, the property disposed of. This evidence can be presented

in the form of a paid-in-full statement from the former lender, or a copy of the HUD-1

settlement statement completed in connection with a sale of the property or refinance of the

prior loan.

Depending on the circumstances, if you have already used a portion of your VA-guaranteed

amount (up to $89,912), and the used portion cannot be restored, any remaining portion of

your VA guarantee is available for use on another loan. You will have to ask your lender if your

remaining VA-guaranteed portion will be enough, or if you will need to make a down payment

to qualify for the loan. If you have a question about your specific case, contact VA.

 

 

 

What are the advantages of a Kentucky VA Home Loan?

The following is a quick list of reasons why a Kentucky VA loan may be your best option:

No down payment required

VA funding fee may be financed in the loan

VA Loans do not require perfect credit – there is no credit score cut-off

VA funding fees may be waived for veterans with VA rated service-connected

disabilities and surviving spouses of veterans with service-connected disabilities

 

Closing costs may be shared between the buyer and lender

Flexible mortgage types – fixed, hybrid and traditional ARMs

No mortgage insurance premiums – this is huge in today’s housing market

VA guarantied mortgages are assumable

No pre-payment penalties

Homes are inspected and appraised by VA prior to approval and/or during

construction

 

VA can offer assistance to veteran borrowers in default due to temporary financial

difficulty

 

Refinance and Interest Rate Reduction loans are available

All in all, the pros far outweigh the cons. And, considering there are very few “no-down

 

payment” mortgage options around that offer lower associated fees, using your VA home

 

loan benefit seems like a no-brainer – as long as the red tape doesn’t scare you.

     

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Author: Louisville Kentucky Mortgage

I have helped over 589 Kentucky families buy or refinance their home over the last 18 years. Realizing that this is one of the biggest, most important financial transactions a family makes during their lifetime, I always feel honored and respected when I am chosen to originate their personal home loan. You can count on me to deliver on what I say, and I will always give you honest, up-front personal attention you deserve during the loan process. I have several advantages over the large banks in town. First, I can search and negotiate for your loan options through several different mortgage companies across the country to get you the best deal locally. Where most banks will offer offer you their one set of loan products. I have access to over 10 different mortgage companies to broker your loan through to get you the best pricing and loan products that may not fit into the bank's program due to credit, income, or other underwriting issues. You will not get lost in the shuffle like most borrowers do at the mega banks; you're just not a number at our company, you are a person and we will treat you like one throughout the entire process. Give us a try or let us compare your options on your next mortgage transaction. Call me locally at 502-905-3708. Free Mortgage Pre-Qualifications same day on most applications. Email me at kentuckyloan@gmail.com with your questions I specialize in Kentucky FHA, VA ,USDA, KHC, Conventional and Jumbo mortgage loans. I am based out of Louisville Kentucky. For the first time buyer with little money down, we offer Kentucky Housing or KHC loans with down payment assistance. This website is not an government agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency. NMLS# 57916 http://www.nmlsconsumeraccess.org/ Joel Lobb Senior Loan Officer (NMLS#57916) American Mortgage Solutions, Inc. 800 Stone Creek Pkwy, Ste 7, Louisville, KY 40223 phone: (502) 905-3708 Fax: (502) 327-9119 kentuckyloan@gmail.com Company ID #1364 | MB73346 http://mylouisvillekentuckymortgage.com Equal Housing Lender

22 thoughts on “Kentucky VA Loan Refinance and Purchase Guidelines”

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