When a Veteran applies for a cash out refinance, and right now
is a marvelous time to take the lower interest rate, the Veterans
Administration protects the Vet by making certain they are
getting an excellent deal with the following conditions:
Net Tangible Benefit (NTB). NTB standards apply to all cash-out refinancing loans.
It consists of the NTB test, Loan Comparison, and Home Equity Disclosure
Here are the ins and outs for the NTB test
(1) NTB Test. All cash-out refinancing loans must past pass the NTB test. This requirement is met if the refinancing loan satisfies at least one of the following: (a) The new loan eliminates monthly mortgage insurance; or (b) Loan term of the new loan is less than the loan term of the loan being refinanced; or (c) Interest rate of the new loan is less than the interest rate of the loan being refinanced. (Note: If the loan being refinanced had an adjustable interest rate or was modified, the current interest rate must be used when determining if this requirement has been met.); or (d) The monthly (principal and interest) payment of the new loan is less than the monthly (principal and interest) payment of the loan being refinanced; or (e) The Veteran’s monthly residual income is higher as a result of the new loan. (residual income, including refinancing monthly PITI (principal, interest, taxes, and insurance) payment vs. current residual income, including monthly PITI payment of the loan being refinanced.) In cases where TI amounts are changing between the application date and the closing date of the refinance transaction, the new TI amount will be used in determining residual income for both the current and refinanced loan); or (f) The new loan is used to payoff the Veteran’s interim construction loan; or (g) The new loan LTV is equal to or less than 90 percent of the reasonable value of the home, i.e. LTV ≤ 90%; or (h) Refinance of an adjustable-rate mortgage to a fixed-rate mortgage.
Even though mortgage rates are SUPER Low
In order to cash out refinance we need to ft the rule
Let's talk about how we can save you money!
Interest Rate Reduction Refinancing Loan (IRRRL) is a mortgage loan made to refinance an existing VA-guaranteed home loan at a lower interest rate.
(949) 784- 9699
NMLS 324982