Hey everybody, it's Jimmy Vercellino and today I'm going to share with you the difference between a VA streamline refinance or a VA cash-out refinance.

I don't know, I feel like the commentator like in this corner, we have the VA streamline versus the I don't know. It's just where my head went. Anyway, sorry guys. So again, VA streamlined versus cash-out. Well, the realty is, is that they're both refinances.

They're both refi's, right? One simply stated, is to pull cash out of your home. So, for example if you had a mortgage and the balance on your existing mortgage was $100,000 and you wanted to increase the balance on your mortgage to $150K, that would be considered a cash out refinance because 30 days later, or how ever long it took you to get the loan closed, that money, about $50K minus any closing costs or prepaid items would be in your account at close of escrow.

With me on that? Now you would use that money to do whatever you want. It's your money. So long as you are qualified, of course. To be able to pull it out.

Back to my friend, the VA streamline in this corner, right. So the VA Streamline is very different. The VA streamline refinances used to do one thing and one thing only, and that's lower your rate. You with me on that? Now it's important to understand that you can't refinance out of a conventional loan and lower your rate into a VA and it be considered a streamline. In other words, a streamline is only VA to VA.

If you go from a conventional to a VA, guess what? That's called cash-out. VA is very particular about that, and then you 'd have to pay for a VA funding fee at a subsequent user rate, which is even more expensive.

So you want to try to avoid that if you possibly can. Sometimes it might make sense if the Veteran is service connected and has a VA disability. One more time, The cash-out is sued to get money back at closing for whatever you'd like. Renovation.

Pay off high interest rate credit card debt, invest that money to streamline VA to VA. Lower the interest rate. No appraisal. No out-of-pocket expenses. No income docs. No asset docs.

None of that other stuff that you had to provide on the first go around when utilizing your VA loan benefit would be required on the cash-out. For more information about VA loans, refinancing how they work, my team and I are here to be a resource for you.