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VA Home Loan Refinance: Should You Stay with Your Current Lender?

Current Lender vs New Lender for VA Loan Refinancing

For many people, refinancing their home mortgage through their current VA lender is the easy option. What more could you ask for? They give you their offer, you accept it, sign the applications, and the new loan is yours. You could be losing out on a lot of savings by refinancing this way, though. Before you refinance through your current lender, or even talk to them about this prospect, you should always shop around and get quotes from as many other lenders as possible. This way, you know where you can get your best offer before approaching your current lender.

Choose the VA refinance program that’s right for you

The first thing to decide when it’s time for refinancing is which program fits with your needs. The VA has two refinancing programs, the Cash-Out Refinance and the Streamline Refinance, also known as the Interest Rate Reduction Refinance Loan (IRRRL). The Cash-Out option will allow you to receive money at the closing of the refinance, which works great if you are behind on bills or need extra cash. If you are trying to get a lower interest rate through refinancing, the IRRRL option is probably your best bet.

Make sure when you are looking at all of your offers, you compare similar types of loans. For example, put all quotes for 5/1 ARM loans up against other quotes for 5/1 ARM loans and all 30 year loans up against other 30 year loans.

After you have completed gathering all your quotes, now is the time you want to approach your current lender. If they try to offer you a higher interest rate than others, you can show them your other offers. Perhaps they will match the lowest one in order to keep your business. If they don’t want to match any offers then you’ll feel great that you did your research because you’ll know where to go.

How to look at your VA refinance quotes

When you find yourself out there looking at mortgage prices, this is what to compare:

  • Prepay costs like property tax and mortgage insurance
  • Anything associated with lender fees, including processing, underwriting, and origination fees
  • Make sure you are comparing the interest rates of similar loan types
  • Fees charged by third parties, like title insurance, appraisal fees, escrow fees, etc
  • According to the VA, if you have a lender who insists they are the sole lender who can refinance with you, they are not telling you the truth and you should shop around and find out for yourself
  • If you decide to refinance through your current lender, they may offer you good terms or even discounts, otherwise you have all your additional quotes to compare
  • You could still qualify for the IRRRL program despite being past due on your current mortgage. Shop around for as many quotes as possible

If you want to get started looking for quotes to refinance your VA Home Loan, we have an entire network of approved VA lenders. Contact one today.

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