Go to 
Estimated reading time: 4 minutes
There were more than 18 million veterans in the U.S. in 2023, according to the Department of Veterans Affairs (VA). If you’re one, there could be a variety of helpful options available as you buy and own a home. Here are three facts about VA loans — loans that benefit eligible veterans, surviving spouses, servicemembers, and members of the National Guard and Reserve.
1. VA home loans can make it easier to buy a home
One of the top facts about VA loans is that they can potentially make buying a home easier and more affordable. Benefits can include:
- Down payments as low as $0;
- Comparatively low rates; and
- No need to pay mortgage insurance (homebuyers typically have to pay for mortgage insurance when they put less than 20% down on their loan)
Depending on your lender, you may also be eligible for a rarer benefit — a temporary discount on your mortgage rate, through what’s called a lender-funded mortgage buydown.
Finally, once you’ve purchased your home, the VA will also provide a “VA home loan guaranty.” The guaranty ensures that the VA will reimburse your lender for a portion of your loan if you go into foreclosure. This means you won’t be responsible for the entire loan balance if you default.
That said, all VA loans (including refinances) usually include an upfront cost to help pay for the guaranty — a funding fee.1 Its cost varies based on factors like your down payment, so be sure to ask your lender for more details. You may also qualify to have it waived if you meet certain requirements.
2. Veterans can potentially cash out 90% of a home’s equity without paying for PMI
VA loans can also help you put more money in your pocket if you’re interested in a cash-out refinance.2,3 As the name suggests, these refinances enable homeowners to turn home equity into cash. They can be used for anything — from home improvements, to debt consolidation, and investments.
Most cash-out loans allow homeowners to turn up to 75–80% of their equity into cash. But in contrast, VA-backed options can allow up to 90%, depending on the lender’s requirements and your state.
VA-backed cash-out refinances also don’t require private mortgage insurance (PMI). PMI is typically associated with refinances when borrowers do not have 20% of the equity left in their home after refinancing. And that would be the case if you took the full VA benefit.
3. Veterans have special refinancing options available to them
A final top fact about VA loans is that they can make refinancing more affordable. If you already have a VA loan, you could be eligible for a VA Interest Rate Reduction Refinancing Loan (VA IRRRL). These loans are available if refinancing can lower your mortgage rate, or if you want to change an adjustable-rate VA loan to a fixed-rate mortgage.
VA IRRRL’s are also known as “streamline loans” because of their simpler, streamlined application process. They typically don’t require income verification, a minimum credit score, or an appraisal.4
Get started on a VA loan
Ready to explore your VA loan options? Talk to one of our mortgage experts about this well-deserved benefit at 800-765-9194 or get started online!
Disclaimers
1. VA loans require a funding fee unless eligible for funding fee exception. Call for details.
2. A cash-out refinance increases your mortgage debt and reduces equity. It may increase the total number and amount of monthly payments, total finance charges, and/or the total amount paid on the mortgage.
3. Available cash or cash-out amount is an estimate of the equity you may be able to withdraw. It is based on an estimated current value of your property minus the estimated current amount owed. The amount of cash-out that may be available to you varies and depends on numerous factors including the value of your property and the maximum allowable LTV, which can vary significantly based on factors such as the loan program, your capacity to afford the new loan, your credit history, and the property type.
4. In some cases, an FHA streamline refinance or VA Interest Rate Reduction Refinance Loan (IRRRL) may require an appraisal and/or full income and asset documentation and full credit qualification. This requirement will increase fees and required paperwork. A licensed Mortgage Professional can inform you of all options available to you as well as the program requirements.
