How Long Before You Can Refinance a VA Loan?

For eligible service members, veterans, and their surviving spouses, VA loans offer distinct advantages, including favorable terms and no down payment requirements. Refinancing a VA loan allows homeowners to potentially secure a lower interest rate, reduce monthly payments, or access home equity.

Minimum Waiting Periods for VA Refinance

Refinancing a VA loan involves specific timing requirements, known as “seasoning periods.” For a VA Interest Rate Reduction Refinance Loan (IRRRL), borrowers must typically wait a minimum of 210 days from the date of the first payment on their original VA loan. Additionally, at least six consecutive monthly payments must have been made on the existing loan. This “210-day rule” helps prevent rapid, potentially disadvantageous refinancing.

For VA Cash-Out Refinance loans, which allow borrowers to access home equity or refinance a non-VA loan into a VA loan, the seasoning period is often similar. While there isn’t a strict VA-mandated waiting period, many lenders require that the borrower has occupied the property for at least six months from the date of the first mortgage payment. This period allows for the accumulation of equity and demonstrates consistent payment history. These are minimum requirements, and individual lenders may impose additional waiting periods or “overlays” based on their specific lending policies.

Understanding VA Refinance Options and Eligibility

Two primary types of VA refinance loans are available, each serving distinct financial goals and having specific eligibility requirements beyond the initial waiting periods. The VA Interest Rate Reduction Refinance Loan (IRRRL), or Streamline Refinance, is designed to reduce the interest rate on an existing VA loan or convert an adjustable-rate mortgage (ARM) to a stable fixed-rate. This option is typically streamlined, meaning it often requires less documentation, and in many cases, no appraisal or credit underwriting is necessary. A fundamental requirement for an IRRRL is demonstrating a “net tangible benefit,” such as a lower interest rate or a more stable loan product. Borrowers must also certify that they previously occupied the home, even if it is no longer their primary residence.

The VA Cash-Out Refinance serves a different purpose, allowing eligible individuals to take cash out from their home equity, pay off non-VA debt, or refinance a non-VA loan into a VA-backed loan. For this type of refinance, current occupancy of the property as a primary residence is generally required. While the VA allows for loan-to-value (LTV) ratios up to 100% for cash-out refinances, many lenders set their own caps, often around 90% LTV. An appraisal is required to determine the home’s current market value for a cash-out refinance. For both refinance types, borrowers must qualify for a VA-backed home loan Certificate of Eligibility (COE), which confirms their military service eligibility.

Preparing for Your VA Refinance Application

Gathering necessary information and documents can streamline the VA refinance application process. Understand your current mortgage details, including the interest rate, outstanding balance, and your loan servicer. Define your financial goals for refinancing, whether it is to achieve a lower monthly payment, reduce the interest rate, or obtain cash from your home’s equity.

Assemble personal financial information, such as income statements, recent pay stubs, and W-2 forms from the past two years. Lenders will also require bank statements and potentially federal income tax returns for the previous two years. A crucial document is your Certificate of Eligibility (COE); while a lender can often obtain this for you, having it ready can expedite matters. Your current mortgage statements and property details are also important for the application.

Costs associated with refinancing can include a VA funding fee, which typically ranges from 0.5% for an IRRRL to 3.6% for a cash-out refinance, depending on factors like prior VA loan use and down payment. Other costs may involve appraisal fees, particularly for cash-out refinances, title insurance, and various closing costs that typically range from 2% to 6% of the loan amount. Many of these costs, including the funding fee, can often be financed into the new loan, reducing out-of-pocket expenses at closing. Researching and comparing VA-approved lenders, as terms, rates, and lender-specific requirements can vary.

Submitting and Closing Your VA Refinance

The formal application process begins with your chosen lender. Submit your application online, in person, or over the phone. This initiates the underwriting process, where the lender evaluates your financial information and eligibility. Underwriters review documents, conduct credit checks, and verify income and assets to ensure you meet both VA and lender guidelines for repayment ability.

For VA Cash-Out Refinances, an appraisal will be ordered to establish the property’s value, and title work will be conducted to ensure clear ownership. The underwriting phase typically takes several weeks. After the underwriting review, you will receive either a conditional approval, requiring additional documentation, or a final loan approval.

Upon final approval, you will receive and review closing disclosures, which detail the final loan terms, costs, and fees. The final step is closing, where you sign all necessary loan documents. Funds are then disbursed, and the new loan replaces your previous mortgage. Your first payment on the new VA refinance loan will be due according to the new terms.