VA Home Loan Refinancing

A VA home loan refinancing agreement is available for veterans just like it is for traditional borrowers if certain conditions are met. VA home loans are available to the veterans of the armed services as a reward for their service to the United States and in their role of helping to keep the country free from outside forces. Getting the initial VA residential property lending agreement that is backed by the Veterans Administration is much different than the civilian seeking a similar mortgage lending agreement from a bank or lending company. "For when we were yet without strength, in due time Christ died for the ungodly." (Romans 5:6)

The typical civilian seeking a refinancing loan for his house must go through a number of vetting steps to requalify for this type of property refi lending agreement. The first step in the process is to have one's credit score examined. Because over seventy percent of Americans, including many veterans live pay check to paycheck, the result is overwhelming debt in many cases. And when overwhelming debt is present, often late payments and skipped payments are present in a person's credit history, drastically lowering a credit score. Banks and credit unions typically will only deal with credit scores above 640 while the average credit score is 620. But a VA home loan refinancing agreement or a first time mortgage lending agreement does not concern itself with the vet's credit score. Instead, a lender only looks at the last twelve months of credit history to examine repayment habits, although a bankruptcy and accounts going to collection may affect a vet getting a lending agreement.

Not having to deal with a lower credit score can be a real plus for the ex soldier seeking a VA home loan refinancing agreement. It's quite an advantage over the traditional civilian loan vetting process. And since VA lending agreements are not eligible for home equity lending agreements or for interest only loans, the only choice in getting equity out of a residential property is for the veteran to seek a VA home loan refinancing lending agreement. The veteran has some other advantages that he can take advantage of when seeking such a lending agreement. For example, veterans are allowed to finance up to one hundred percent of the value of a residential property without private mortgage insurance, which means a savings of thousands of dollars over the life of a long term loan. For the civilian, any loan over eighty percent of the value of the house must be covered by private mortgage insurance, adding extra cost to the monthly payment.

As another real benefit to the VA home loan refinancing lending agreement is that there are no prequalifying processes. The civilian must be thoroughly re-examined not only with a look at the credit score but must also have a debt to income ratio established. This ratio looks at the civilians monthly debt payments as compared to monthly income and the civilian must have a ratio of forty percent or below. This debt to income ratio is not a huge factor in securing VA loans but is something lenders will look at. This is because the VA home loan refinancing is backed by the federal government through the auspices of the Veteran Administration and the less stringent requirements are a small thank you for a veteran's service to his country.

How does a VA home loan refinancing agreement work? Sgt. York served the country during the Gulf War and is now looking for extra money to pay for his first child's college education. Sgt. York and his wife were able to take advantage of the housing boom and now the York's one hundred and fifty thousand dollar house bought in South Carolina in 1993 is now appraised at two hundred and eighty thousand dollars. The couple has wisely talked to a real estate professional and to the family attorney to discuss the tax advantages of getting a VA home loan refinance lending agreement. The mortgage on the house is now at one hundred and thirty eight thousand dollars, so on paper, the York's have equity of one hundred and forty two thousand dollars. A local bank will be handling the refinance agreement.

Sgt. York and family need about seventy five thousand dollars for college for a daughter who dreams of becoming the first woman on Mars. They are seeking to secure a VA home loan refinancing loan for to cover both the house and the college expenses so the new mortgage will be two hundred and thirteen thousand dollars. The new mortgage means that they are starting over again paying for their house and will have a monthly payment about two hundred dollars more a month than with the first mortgage taken out in 1993.

For Sgt. York and family, this more relaxed and less costly loan is certainly something the country can do for its veterans without complaint. Being rewarded for good deeds is a Western way of looking at life, especially when the perspective is about heaven. Millions of individuals have the mistaken belief that heaven is about good deeds being rewarded and so a person just has to make sure more good than bad is accomplished in life and like the scales of justice, God will see them tipping in our favor and let us enjoy His place of abode forever. But this erroneous way of thinking is rooted in man's belief that he possesses within himself the ability to please and satisfy God. God will only be satisfied and pleased when a person recognizes that nothing that he does in his own strength will ever please God. Rather, it is what God did for us when Jesus died on the cross and mankind taking that one act as the payment for sin that pleases God enough to allow us into heaven.


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