A VA refinance loan is called a “VA Cash Out” in several refi situations: when the veteran is refinancing more than their current payoff and getting cash in hand, when he or she is consolidating a first and second mortgage, or when they are paying off other liens or consolidating debts.

These are all considered a VA Cash Out. It’s also considered a VA Cash Out loan when a veteran is refinancing a conventional (non-VA) loan into a VA loan. That’s important to know because on a VA Cash Out loan, the funding fee can be anywhere from 2.4% to 3.6% of the loan amount but it is financed into the loan amount. On a $250,000 loan, this can add up to $9,000 to the loan’s principal.

If a veteran has 10% or more disability from the VA, the funding fee is waived. It important that lender discuss these fees with the veteran so they can make educated decisions on their refinance. Indigo Mortgage has helped many, many veterans with VA refi’s; please call with questions and we’ll help show you the best rates and lowest fees to refi your VA loan.