Are you a veteran or active-duty service member looking to save money on your mortgage or tap into your home’s equity? Refinancing your VA home loan could be a game-changer, offering lower interest rates, reduced monthly payments, or access to cash for major expenses. With VA loan refinance rates fluctuating, now is the perfect time to explore your options. Whether you’re considering a VA Interest Rate Reduction Refinance Loan (IRRRL) or a cash-out refinance, this comprehensive guide will walk you through the benefits, eligibility, process, and top lenders to help you make an informed decision.
What Is a VA Home Loan Refinance?
A VA home loan refinance allows eligible veterans, active-duty service members, and surviving spouses to replace their existing mortgage with a new one, often with better terms. Refinancing a VA home loan can help you lower your interest rate, adjust your loan term, or access your home’s equity for financial goals.
There are two primary types of VA refinance loans:
- VA Interest Rate Reduction Refinance Loan (IRRRL): Also known as a “streamline refinance,” the IRRRL is designed to lower your interest rate or switch from an adjustable-rate to a fixed-rate mortgage with minimal paperwork. When working with People’s Bank you won’t have an appraisal and there’s no income or asset verification. We also don’t need to use your credit score if you’ve had some issues that cause it to be below 580. Even if you’ve had a 30 day late payment in the past year we can help.
- VA Cash-Out Refinance: This option lets you borrow against your home’s equity, converting it into cash for debt consolidation, home improvements, or other expenses. This option will require a full appraisal and credit evaluation, but we have very flexible credit terms offering VA loans on credit scores down to 500 and manual underwriting if needed.
Benefits of Refinancing a VA Home Loan
- Lower Monthly Payments: Refinancing can significantly reduce your monthly mortgage payments.
- No Private Mortgage Insurance (PMI): VA refinance loans don’t require PMI, even with less than 20% equity.
- Access to Home Equity: A cash-out refinance lets you borrow against your home’s equity for major expenses.
- Streamlined Process for IRRRL: Minimal documentation and faster closings with Peoples Bank.
- Flexible Credit Requirements: We can work with credit scores as low as 500 or no score at all.
Types of VA Refinance Options
VA IRRRL (Streamline Refinance)
- Requirements: Existing VA loan, on-time payments, no appraisal or credit score needed.
- Pros: Low funding fee, minimal paperwork, fast closings, no out-of-pocket costs.
- Cons: No cash-out option.
VA Cash-Out Refinance
- Requirements: Full appraisal, credit check, sufficient equity, and DTI within limits.
- Pros: Access to cash, competitive rates, no PMI, can refinance non-VA loans.
- Cons: Higher documentation and credit standards required.
Eligibility and Requirements for VA Refinance
- VA Entitlement and valid COE
- Existing Loan type
- Credit and Income requirements
- Occupancy rules
- Funding Fee info
- Net Tangible Benefit requirement for IRRRL
How to Refinance a VA Home Loan: Step-by-Step Guide
- Define Your Financial Goals
- Verify Eligibility
- Apply for the Refinance
- Close the Loan
Checklist for Refinancing
- Copy of driver’s license
- Homeowners insurance
- Recent mortgage statements
- Income verification (for cash-out)
- Home appraisal (cash-out only)
Current VA Refinance Rates and Trends in 2025
As of May 2025, VA refinance rates range from 5.375% to 6.75%. Rates are competitive, especially without PMI. Peoples Bank offers low wholesale mortgage rates and personalized service.
How to Choose the Best VA Refinance Lender
- Compare rates and fees
- Veteran expertise
- Customer service
- Reputation
- Fast closings
Common Mistakes to Avoid When Refinancing
- Not comparing lenders
- Ignoring fees
- Refinancing without a clear goal
- Not using a refinance calculator
FAQs About VA Home Loan Refinancing
- Can I refinance a non-VA loan into a VA loan?
- Yes, through a VA cash-out refinance.
- How long does the VA refinance process take?
- IRRRL: ~21 days, Cash-Out: ~30–45 days.
- Is the VA IRRRL worth it in 2025?
- Yes, if you can lower your rate by 0.5% or more and recoup costs in under 3 years.
- What are the costs of a VA cash-out refinance?
- Funding fee, closing costs, appraisal fee—usually rolled into the loan.
- Can I refinance my VA loan with bad credit?
- Yes. IRRRL has no minimum score; cash-out accepts scores as low as 500.
Start Refinancing Your VA Home Loan Today
Refinancing your VA home loan in 2025 can unlock significant savings, provide access to cash, or help you achieve other financial goals. Ready to get started? Give us a call today or click here to complete your pre-qualification form and we will contact you as soon as possible to discuss your options.
