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With its $0 downpayment, refinancing a VA loan is an amazing mortgage option to veterans, select military spouses, and service members. Private lenders issue VA loans and the U.S Department of Veterans Affairs (VA) guarantees these loans.

Zero downpayment

Yes, there’s such a thing as refinancing without a downpayment. Other government-backed loans like the FHA loan requires at least 3.5% downpayment.

No need for Private Mortgage Insurance (PMI)

Note that you can also avoid paying the funding fee altogether if you encounter a service-related disability and meet other specific requirements. You can also waive it if you are a surviving spouse of a veteran who perished in service or from a disability due to his/her military service.
Competitive home loan rates

VA home loan interest rates can be lower than what you might expect with a conventional loan. You can also enjoy relaxed credit and income requirements, which makes qualifying for a refinance easier. There’s also a limit on closing costs that can help you have a better cope with the upfront expenses better.

No prepayment penalties

You can pay off your loan early if you don’t want to worry about any added fees.
How to refinance into a VA loan

You have two main options when you choose to refinance with a VA loan. The sure thing is availing it can help you lower your monthly payment or getting cash out. You can also avail it if you want to switch from a conventional loan to a VA loan.
Interest Rate Reduction Refinance Loan (IRRRL)

You can use the IRRRL to refinance an existing VA loan into a new one with a lower interest rate. It’s available without any credit underwriting or an appraisal. You can also include all of the closing costs of your new loan product.

Also, the funding fee for this VA refinances loan type may be lower than the cost for applying for a VA loan to buy a property.

You can pick this option if you can qualify for a lower interest rate and if you want to have a lower monthly payment. But note that you can’t get a cash-out from your equity if you refinance your current VA loan with an IRRRL.

VA cash-out refinancing

This refinancing option lets you take out some or all of your accrued equity. A VA cash-out refinance loan allows veterans to get their hands on cash to use for making home improvements, paying off debt, and more.

You can also use this choice to refinance a conventional mortgage or an existing VA loan. The VA guarantees loans up to 100% of the value of the home. Like other VA home loans, this type needs you to meet military service requirements. You also need to have a Certificate of Eligibility (COE) on hand.


If you want to refinance into a VA loan, make sure to find better rates and terms using a VA loan calculator. You also need to compare rates and terms across various lenders since loan providers set them for each loan and not the federal government.

Home refinance for veterans comes easier with its lower interest rates, no down payment requirement, and limited closing costs. With the competitive prices so low, it’s almost always a good time considering getting a VA loan.