The Easiest Way To Refinance Your VA Mortgage

In this episode, Jennifer talks about two key ways to make refinancing your VA mortgage easier. She emphasizes the importance of having a genuine conversation with an expert lender, discussing your short-term and long-term financial goals to ensure the refinance truly benefits you. Jennifer also highlights the need for realistic expectations, explaining the differences between a simple VA Interest Rate Reduction Loan (IRRRL) and a more involved cash-out refinance. She warns listeners about red flags and predatory practices, encouraging vigilance to protect their equity.

Transcript

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Today we're going to be talking about two ways to make refinancing your VA mortgage easier. Now, before I begin, I think it's important you know who I am because there's a lot of people on social media right now talking about VA loans, talking about VA mortgages. A bunch of them don't actually do loans. They just sell your information to call centers. And then you've got the other ones where they're trying to do VA loans, but maybe they've closed for a year. I'm Jennifer Beeston. I've been a lender for almost 20 years now. I've been ranked the number one VA loan officer in America for overall volume, for top purchase, all different years. But this is something my team and I do every single day. So when I say here are my two tips to make VA refinancing easy, this is what I'm talking about. Okay, really quickly, just in case you don't know what a refinance is. A refinance is when you take out a new mortgage, it pays off your old mortgage. So there's two reasons you might do a VA refinance. Number one, to lower the interest rate. In a situation like that, the new mortgage pays off your old mortgage, you have a lower rate, lower payment. Hurrah! Hurrah, let's do it together. Okay, the other type of refinance is a cash out refinance. So with that, the new mortgage you're taking out pays off your old mortgage and it gives you some of your home's equity. So for example, if you bought a house for $400,000 and now it's worth $700,000 and you want to remodel your kitchen or maybe you have some high interest credit card debt and you want to take $100,000 of your equity, well, then we would do a loan for $500,000. We would pay off that $400,000 mortgage and give you the rest. Cash out refinance. Okay. So what is my number one way to make refinancing a VA mortgage easy? Have the conversation. You need to have a conversation. The biggest mistake that I see is people just fill out applications with a bunch of different lenders. They think they want to take cash out or they think they want to do an interest only, but the lenders they're working with are just order takers. So they're not looking at the whole financial picture. They're not having the conversation with you of like, hey, like actually this doesn't make sense. Like, let's do this, let's wait, let's set up a target. They're just doing whatever you want, whether it financially makes sense for you or not. Okay. So number one, have the conversation. Uh, give my team a call. Look, we can help you nationwide, 786-933-2077. It's my core team everywhere except for Rhode Island or Utah. In those states, I would refer you to a very good friend of mine that's excellent as well. Our conversations, we're talking about your short-term and your long-term financial goals because that can help us determine what's going to make the most sense for you. So, for example, I had a client a couple years ago where she was about to close a refinance with another lender. She just wanted me to check the numbers, which we're always happy to do. So, no, you guys can reach out to us, even if we're not doing your loan, we'll make sure you're not getting ripped off. And I looked at it and I was like, okay, this is okay, but it's gonna take over six years for this to make sense because when we're looking at the refinance, we're looking at the cost of the refinance versus how long it takes for that cost to pay off. And in her case, it was six years. And she goes, Well, I'm gonna be selling the house in six months. I'm like, whoa, why are you refinancing? She goes, Well, the guy said it would lower my payment for those six months. I'm like, you're wasting so much money. And I walked her through the math. She didn't do the refinance. She did sell the house. She ended up buying a new house. We helped with that loan. If she had just gone forward with the cash out refinance and having that lower payment for six months, the amount that she would have paid in fees would have stripped a bunch of her equity. It was not good. It was not good. So that's why we want to talk about short-term and long-term goals. Another trigger could be you could be talking to me and be like, Jen, I just want to lower my interest rate. We're talking. And then in the conversation, you're like, yeah, my kids are going to, I got two twins going to college in six months. I got to come up with money for that. So I think if I get a lower payment, that will help. I might go, whoa, whoa, wait, wait, how much do you need to come up with? What's realistic? You know, let's see if maybe we should take out cash. Like it might make sense. Let's look at the math. That's what these conversations are about. They're about figuring out what works for you. It's never about pushing stuff. Like you'll never hear us go, oh, don't just remain a pool. Uh-uh. We don't do that. No, no, no. We're not going to tell you to take money out of your house unless you're drowned in high interest credit card debt or you have a specific financial burden coming on, such as college or remodeling. Okay. And sometimes we'll look at the situation. You may be like, hey, I really want cash. I need it for this, but we may look at it and go, hey, like it doesn't work. Because one of the things people don't realize is that if you do a VA interest rate reduction loan, the funding fee, remember that from when you bought the house, is much lower than on a cash out refinance. So the funding fee on a VA interest rate reduction loan is half a percent, whereas on a cash out, it's over 3%. So if you get VA disability, of course, you don't have the funding fee. But if you don't get VA disability, this is a very big consideration. Um, I've literally talked to people where they have mortgages that are like $700,000 and they don't get VA disability and they want 10K. And I'm like, don't do this because the funding fee alone would have been over $21,000 and you don't pay $21,000 plus dollars to take out 10. You know, so we've talked about home equity lines of credit because for their financial situation, that makes sense. So if you want your VA refinance to be easy, number one, talk to experts and have the conversation. Okay. It also saves the drama of you starting off as interest only and then you flip to cash out and then you flip back because you already have had the conversation. Very important. Very important. The number two way to have the easiest VA refinance experience. Realistic expectations. Okay, let's talk about this. Because, for instance, if you've done a VA interest rate reduction loan before and then you do a cash out, it's a different world. As long as you know what the lender's gonna ask for, it's gonna be easy and painless because you'll be able to get it to them immediately. And that's very important. So a VA interest reduction loan, the VA Earl, we don't need an appraisal. We don't need income documentation. The VA interest rate reduction loan is designed to just lower that rate in terms of how easy that loan is. Easy, so easy. Lowest document loan in the industry, so easy. VA cash out refinance, it's not hard, it's just like a purchase. So when you bought the house, remember how you had to get an appraisal, you had to verify your income documentation, depending on what state you were in, are in. You may have needed a termite report, maybe a well report. On a VA cash out refinance, we need all that same documentation again. And you're like, well, I bought the house a year ago. Can I use that termite report? No. Can I use that appraisal? No. So on the VA cash out refinance, the lender's getting all new documents. Okay, very, very important. And if you have a realistic expectation about that, great. The other reason I wanted to tell you about realistic expectations is because one of the things that troubles me in the industry is that sometimes people do shady stuff. And one of the shady things they'll do is they'll tell a veteran they're just lowering their rate, but they're really doing a cash out refi. So if you think you're doing a VA interest rate reduction loan, but the lender needs an appraisal, that's a red flag. And you're like, well, Jen, why would they like do a cash out instead of an Earl? VA interest rate reduction loans are restrictive in terms of how much you can really charge the client because it has to financially make sense within three years. The cash out, there's no barrier on that. I literally saw a loan estimate yesterday where the lender was charging $35,000 to give the client 21. It was so predatory and crazy. So if you're ever doing a VA interest rate reduction loan and someone's asking you for an appraisal, someone's asking you for a ton of income documentation, that's not normal. It's a red flag. Please get a second opinion. I cannot stress it enough. So, look, overall, getting a VA refinance is super easy. It's just like a purchase. As long as you know what you're doing, if you're working with experts, but the biggest thing that I think were people, people assume that with lenders, they have to do what's in their best interest, that a lender has to do what's best for you. And the unfortunate fact is we don't always see that. So please, please, please, eyes wide open, make sure you're watching fees, rates, all of that. And make sure you're actually talking to a lender that's gonna talk to you about your long-term and short-term financial goals. Every time you refinance, it costs money. So be careful out there. Um, questions, comments, if you want to work with us to talk about refinancing, set up a target for when it actually makes sense or make sure you're not getting ripped off. Reach out to myself and the team 786 933 2077. You can call and text us. Thanks for watching.