The VA made a significant change on October 10, 2008 in an effort to help Veteran’s who might be caught up in a subprime mortgage. The Veteran’s Administration never made any subprime loans, and even the adjustable rate mortgages offered through the VA are considered to be some of the safest, most conservative products offered… here’s what they did:
The increased the amount of cash a veteran can pull out of their primary residence on a refinance to equal 100% of the maximum loan amount for the area… and they changed the maximum loan amounts offered through the VA to more closely match those of Freddie Mac and FHA High Cost Area loans. To find out how much the maximum VA loan is in your area – click here.
Veteran’s who qualify for these 100% mortgage loans were sometimes discouraged to take them, because 100% subprime loans did not have any additional guarantee fees with them, and for a period of time, they were the cheaper mortgage tools. The rational was that the Veteran would take an adjustable rate, 100% subprime loan, and then when it was time for the adjustment, the home value would have appreciated, and the equity would allow the Veteran to refinance into a Conventional Loan.
If you have questions about refinancing your home with a VA loan, please call us!