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At Indigo Mortgage, we close more VA loans than any other company in New Mexico. We understand veteran’s requirements and work to make the process smooth for all veterans who have served our country.

There are several options a veteran has in order to take advantage of the VA cash-out loan program:

  1. When a veteran has an existing mortgage that is not currently a VA loan, but wants to refinance that mortgage into a lower rate using the VA:
    --The VA will allow up to 100% of the value of the home to do the refinance. So if the veteran owes 200K on the home and the value is 200K they can take advantage of the VA loan.

  2. If a veteran wants to pay off a 1st and 2nd mortgage:
    --The VA will allow up to 100% of the value to pay off both loans.

  3. If the Veteran wants to do a debt consolidation:
    --The VA will allow 100% of the value IF all of the proceeds go to pay off debts. It will not allow 100% if the veteran wants cash in hand.

  4. If the veteran wants cash-out to do home improvements, or just cash-in hand
    --The VA will allow 90% of the loan to value in this case.

The VA does not have any monthly mortgage insurance so there is never any PMI on any Veteran loans but the VA does have a funding fee. If the veteran has used their benefit before, and wants to use it a second time the funding fee is 3.3% which is financed and added to the top of the loan. If the veteran is a 1st time user of the eligibility then the funding fee is 2.15%. Now if the veteran is receiving 10% or more in disability then all funding fees are waived.  As you can see, there are many options for the veteran, so I suggest they just call the VA Mortgage loan center at Indigo Mortgage and let one of our VA loan officers answer any questions.

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