Orange County FHA, VA & First Time Buyer Loan Information

My goal is to provide valuable information for home buyers, both First Time Buyers and Move Up Buyers. This information will be about loan programs such as FHA ,VA, Conventional Fannie Mae and Freddie Mac, Reverse Mortgages, and even Portfolio Jumbo programs. I will also touch on tax advantages of homeownership, Rent vs. Own analysis, and any other aspect of loans and home ownership that will be of interest to Orange County home buyers and homeowners.

VA Allows for 100% Loan to Value Cash Out Refinancing

VA is one of the most unique loan programs available in Orange County, primarily because of a Veterans ability to purchase a home with no down payment up to a price of $625,500.  (2016 100%  Limit) But what many Orange County Veterans don't realize is that VA also allows for cash out refinancing up to 100% of the properties value (and county VA loan limit of $625,500 in 2016). 

Different Types of VA Refinancing

There are three basic refinance scenarios when it comes to the VA loan program. First, there is the IRRRL, or Interest Rate Reduction Refinance Loan. This refinance is specifically for those who already have a VA loan and are just looking to lower their interest rate. This is a "rate and term" refinance, meaning no cash is going back to the borrower. This is a great program because there is no appraisal and no qualifying. Super easy. The second type of VA refinance is someone who has a non-VA loan and is looking to refinance into a VA loan. This has been popular for those who wanted to refinance out of either an FHA loan or a Conventional loan with mortgage insurance. VA does not have monthly mortgage insurance and allows refinancing to 100% loan to value. The third type of refinance is where the Veteran wants to pull some equity from their home. They may or may not already have a VA loan.

With interest rates still fairly low and home prices up, some Veterans are taking advantage and pulling cash out for making those home improvements they have wanted to make. Other reasons for pulling cash out include debt consolidation, education costs, investments, etc. 

Many lenders don't follow all VA loan guidelines to the letter, and this guideline is one of them. Many lenders put a cap on the loan to value for cash out at 90% of the properties value. But there are a few VA lenders offering cash out refinancing to 100% loan to value.

Important Factors to Consider with a VA Cashout Refinance

Just because you now have equity doesn't mean it automatically makes sense to do a cashout refinance. Unlike the VA Interest Rate Reduction Refinance Loan, which comes with a low VA Funding Fee equal to .5%, a VA cash out refinance comes with a full 2.15% Funding Fee for first time use, or 3.3% Funding Fee for any subsequent use of eligibility. (Click to see the full Funding Fee chart) 3.3% is a big amount that is tacked onto the back end of the loan, so it's important to have a VA Loan Specialist working with you who can prepare custom, detailed loan scenarios showing a breakdown of the new loan amount, including the Funding Fee, payment including taxes and insurance, closing costs and prepaid expenses, and an estimate of the amount of "cash" going to the borrower after the closing of the refinance. For those Veterans who qualify for the Funding Fee waiver, a cash out refinance can look a lot more attractive.

Authored by Tim Storm, a California Mortgage Loan Officer MLO 223456 – Please contact my office at Fairway Independent Mortgage Corporation. Direct line at 949-640-3102.

Find Tim Storm on Google+


Subscribe to my blog Via Email:  Enter your email address:

Delivered by FeedBurner

Comment balloon 0 commentsTim Storm • May 15 2014 11:36AM
VA Allows for 100% Loan to Value Cash Out Refinancing
VA is one of the most unique loan programs available in Orange County, primarily because of a Veterans ability to purchase a home with no down payment up to a price of $625, 500. (2016 100% Limit) But what many Orange County Veterans don't realize… more
How to Restore VA Loan Eligibility
The VA loan program is a great way for a Veteran to buy a home in Orange County since it allows for 100% financing and has no mortgage insurance But what many don't realize is that it can be used more than once. As a matter of fact, there is… more
Million Dollar VA Loans Are Possible in Orange County, CA
It is possible to get a $1, 000, 000 VA loan in Orange County, CA, which is always a big surprise to people learning that for the first time. As a matter of fact, there a VA lenders willing to go as high as $1, 500, 000 on a VA loan. Of course, if this… more
VA Loan Limit for Orange County, CA in 2014
The 100% financing VA loan limits for Orange County in 2014 actually went up. The 2013 VA loan limit was $668, 750, but for 2014 the 100% VA loan limit will be $687, 500. This means it will be possible for an Veteran in Orange County to purchase a… more
FHA Loan Limits for Orange County, CA to Decrease in 2014
As announced on December 6, 2014 in the FHA Mortgagee Letter 2013-43, FHA loan limits in Orange County will be lower in 2014 versus 2013. Other California counties will be effected by the loan limit drop as well, including Los Angeles, Riverside,… more
How To Remove FHA Mortgage Insurance
A common question among FHA borrowers is "how can I remove the FHA mortgage insurance on my loan " There are a few answers to that question, and it depends on a few things. Just a Few of the Questions that will lead to the Answer When… more
Why Refinancing from a CalVet Loan to a VA Home Loan Might Make Sense
The CalVet loan program is for purchases only CalVet borrowers wishing to refinance will need to do it into another type of home loan. The most logical type of loan is the standard VA home loan. In high cost areas of California, like Orange… more
Getting a VA Loan After a Foreclosure or Short Sale
The VA home loan program has very flexible credit standards when it comes to Veterans with a foreclosure or short sale. A foreclosure or short sale is not the end of the world, and the truth is that within only two years a Veteran can become a home… more
The VA Home Loan - Easier to Close Than You Would Think
The VA home loan is a fairly easy loan to close. It is of course important that several things are taken care of early in the loan process to make sure there are not surprises at the closing table, but that can be said about any loan program. So… more
Stated Income Jumbo Home Loans in 2013? Really?
Despite the continued tightening of guidelines within the mortgage industry, there are a few new stated Jumbo Home loan programs available for high net worth home buyers in California Although the title of this article is "stated income home… more