Refinance a mortgage with a VA loan. Lower the rate, or take cash out.
You can refinance a mortgage with a VA loan in two ways. A VA IRRRL lowers the rate on an existing VA loan with light paperwork and usually no appraisal. A VA cash-out refinance replaces any current mortgage, VA or not, and turns equity into cash. Both need VA eligibility and a file that fits lender guidelines.
Most veterans we talk to already know they have the VA benefit. What they do not always know is that it works on a refinance too, and that the two VA refinance programs solve completely different problems. One is about the payment. The other is about the equity. Tell us which one you are after and we will run the numbers both ways, then place the file with a lender in our network that fits it.
Who it's for
A fit if you're…
Holding a VA loan at a rate above what the market offers now
On a VA adjustable-rate loan and wanting a fixed payment
Eligible for VA benefits but currently paying FHA or conventional mortgage insurance
Needing cash for a renovation, tuition or high-rate balances, with equity in the home
A surviving spouse or service member who is not sure what the benefit allows
IRRRL: light paperwork
The VA requires no appraisal and no income verification on an IRRRL. Some lenders ask for more, and we tell you which ones before you apply.
Cash-out: any current loan
A VA cash-out refinance can replace a VA, FHA or conventional mortgage, as long as you are eligible and live in the home.
No monthly mortgage insurance
VA loans carry no monthly mortgage insurance at any loan-to-value. There is a one-time funding fee, waived for many disabled veterans.
High leverage available
VA rules allow cash-out up to 100% of value. Many lenders cap lower, and placing the file with the right one matters.
Former home? IRRRL still works
An IRRRL only needs prior occupancy, so a VA-financed home you have since moved out of can usually still be refinanced.
Broker, not lender
8Twelve arranges the loan and a lender in our 40+ network funds it. We compare overlays so you are not stuck with one lender's rules.
Two ways to refinance a mortgage with a VA loan
Start with the goal, because it picks the program for you. If you want a lower rate or a fixed rate on a loan that is already VA, the IRRRL is built for it. If you want cash, or you want to move a conventional or FHA loan into a VA loan, that is the cash-out refinance, even when you take no cash at all.
VA IRRRL compared with a VA cash-out refinance
Attribute
VA IRRRL
VA cash-out refinance
Current loan
Must be a VA loan
Any mortgage: VA, FHA, conventional
Purpose
Lower rate, or ARM to fixed
Cash from equity, or move into VA
Appraisal
Not required by the VA
Required
Income documents
Not required by the VA; lenders may ask
Full documentation
Occupancy
Certify you lived there before
Must be your primary residence
Maximum loan
Based on the existing VA balance
Up to 100% of value under VA rules; lenders often cap lower
The IRRRL exists to get you into a better VA loan with as little friction as possible. The VA does not require an appraisal, an income check or a fresh credit underwrite, although lenders are allowed to add their own requirements and many pull credit. What the VA does insist on is a real benefit to you. Moving from fixed to fixed, the new rate has to be at least half a percentage point lower. And the costs have to pay for themselves: the monthly savings must recover the closing costs within 36 months.
Your current loan must be a VA loan
Seasoning: 210 days since your first payment was due, and six consecutive monthly payments made
Net benefit: a lower rate, or a move from an adjustable rate to a fixed rate
Recoupment: closing costs recovered from the monthly savings within 36 months
No cash out beyond small adjustments at closing
Illustrative example only
Round numbers, chosen to show the math rather than to reflect any particular lender or file. Your figures, program and pricing will differ.
Illustrative VA IRRRL recoupment test
Current principal and interest
$2,150 / mo
New principal and interest
$1,960 / mo
Monthly saving
$190
Closing costs on the new loan
$4,750
Months to recover the costs
25 months
25 months is inside the 36-month window, so this refinance would pass the VA recoupment test. If the costs were $7,500, it would take about 40 months and the loan would not qualify as structured.
For illustration only. Not a commitment to lend, a rate lock or an offer of credit. Terms vary by lender, by property and by file.
This is the program for veterans who want to use their equity. It is a full refinance: appraisal, income, credit, and a Certificate of Eligibility. In exchange, it can replace any existing mortgage and go to higher leverage than most cash-out programs. VA rules allow up to 100% of the appraised value, though many lenders stop at 90%, which is why where the file is placed matters. It also works with no cash at all, which is how a veteran with an FHA loan gets out of monthly mortgage insurance. To size it, use the cash-out refinance calculator with your own numbers, or read how a conventional cash-out refinance compares.
Illustrative example only
Round numbers, chosen to show the math rather than to reflect any particular lender or file. Your figures, program and pricing will differ.
Illustrative VA cash-out refinance on a $400,000 home
Appraised value
$400,000
Lender maximum (90% in this example)
$360,000
Current mortgage payoff
$250,000
Gross cash available
$110,000
Less closing costs and funding fee (example)
-$12,000
Approximate cash to you
$98,000
If the funding fee is rolled into the loan instead of paid from proceeds, the cash figure rises but so does the balance. A veteran receiving VA disability compensation would not pay the funding fee at all.
For illustration only. Not a commitment to lend, a rate lock or an offer of credit. Terms vary by lender, by property and by file.
If your current VA rate is already low and you only need part of your equity, refinancing the whole balance can cost more than it saves. A HELOC or a fixed home equity loan leaves the first mortgage alone and prices only the new money. If you are planning to move within a couple of years, the closing costs may never pay back. And if you are buying rather than refinancing, the VA loans page covers the purchase side. The refinance calculator will show your break-even month either way.
A refinance resets the clock. Taking a new 30-year loan on a mortgage that is 8 years in adds interest over time even if the payment drops.
Rolling the funding fee and closing costs into the loan raises the balance you owe and reduces your equity.
Cash-out at high leverage leaves little cushion if home values soften. Taking less than the maximum is often the better structure.
Lenders set their own credit minimums, debt-to-income limits and loan-to-value caps on top of VA rules. Terms are available across our lender network and vary by file.
Nothing on this page is an offer to lend or a commitment to a rate. A loan estimate shows the actual costs.
FAQ
Questions buyers actually ask
How does a VA cash-out refinance work?+
A VA cash-out refinance replaces your current mortgage with a new VA-guaranteed loan that is larger than what you owe. The difference, less closing costs and the VA funding fee if it applies, comes to you at closing. It needs a new appraisal, full income and credit documentation, a Certificate of Eligibility, and the home has to be your primary residence.
How much cash can I take out with a VA cash-out refinance?+
VA rules allow a cash-out refinance up to 100% of the appraised value, but many lenders cap it lower, commonly at 90%. Take the appraised value, multiply by the lender's maximum loan-to-value, and subtract your current payoff. What remains, less closing costs, is roughly the cash available.
Can I do a VA cash-out refinance if my current loan is not a VA loan?+
Yes. A VA cash-out refinance can pay off a conventional, FHA or other loan, as long as you are eligible for the VA benefit and the home is your primary residence. Some borrowers do this with no cash at all, simply to move into a VA loan and drop monthly mortgage insurance.
What is a VA IRRRL?+
IRRRL stands for Interest Rate Reduction Refinance Loan, often called the VA streamline. It refinances an existing VA loan into a new VA loan at a lower rate, or from an adjustable rate into a fixed rate. The VA does not require an appraisal or income verification for it, although individual lenders may ask for more.
How soon can I refinance my VA loan?+
When you refinance an existing VA loan, the VA requires that at least 210 days have passed since the first payment was due and that you have made six consecutive monthly payments. Lenders can set stricter timelines. A VA cash-out refinance of a non-VA loan follows the lender's own seasoning rules.
Do I have to live in the home to refinance with a VA loan?+
For a VA cash-out refinance, yes: the home must be your primary residence. For an IRRRL, you only need to certify that you lived in the home at some point, so a former home that is now a rental can usually still be refinanced with an IRRRL.
What is the VA funding fee on a refinance?+
The VA funding fee is a one-time charge set by the VA and paid at closing or rolled into the loan. It is lower on an IRRRL than on a cash-out refinance, and it is waived for veterans who receive VA disability compensation and for certain surviving spouses. Your loan estimate will show the exact figure.
What credit score do I need to refinance with a VA loan?+
The VA itself does not set a minimum credit score. Lenders set their own, and the minimum is usually higher on a cash-out refinance than on an IRRRL. Requirements vary across our lender network, so the honest answer depends on the file.
What are VA refinance rates today?+
We do not publish rates. VA refinance pricing moves daily and depends on the program, your credit, the loan amount, the loan-to-value and the lender. An IRRRL and a cash-out refinance are also priced differently. A fit check gives you real numbers for your own file.
Can I refinance a VA loan into a conventional loan?+
Yes. If you have built enough equity, a conventional refinance can make sense, for example to free up your VA entitlement for another purchase. You lose the VA protections and may need mortgage insurance below 20% equity, so it is worth comparing both before deciding.
Is a VA refinance better than a HELOC for getting cash?+
It depends on the rate on your current mortgage. A VA cash-out refinance replaces the whole loan, so if your existing rate is low, you give it up on the entire balance. A HELOC or home equity loan leaves the first mortgage in place and prices only the new money. Run both before you choose.
See which VA refinance fits.
A 3-minute application. A soft-credit rate estimate. We structure and place your file with the lender that fits it.
