With attractive rates and more lenient qualification criteria, VA-backed mortgages allow military veterans to achieve the dream of homeownership. Depending on market conditions and the terms of your home loan, you may be able to lower your monthly payments or interest rate through a special refinancing loan from the VA. However, there are some pros and cons to consider before taking advantage of a refinancing offer.

Should You Refinance Your VA Mortgage?

The Advantages of Refinancing

Adjustable-rate mortgages often have low initial payments, but your monthly expenses can quickly rise along with market interest rates. If you’re currently paying an adjustable-rate home loan, refinancing to a fixed-rate mortgage could save thousands of dollars and give you predictable monthly payments. Consolidation is an especially smart financial move if you can achieve at least a 1% reduction in your interest rate. With an Interest Rate Reduction Refinance Loan (IRRRL), borrowers who purchased their house with a VA mortgage can refinance without an appraisal or credit check, potentially streamlining the process and reducing the costs.

When Refinancing May Not Be the Ideal Solution

Some refinancing offers come with considerable out-of-pocket fees, although the IRRRL program allows you to roll these costs into the home loan itself. However, bear in mind that you’ll be paying interest on those fees, which could add up to thousands more over the life of the loan. You should also avoid refinancing your loan if you’ve already made considerable progress paying it off. For instance, if you’re already 10 years in on a 30-year mortgage, refinancing for another 30 years will mean making payments and losing money on interest for another 10 years.

Refinancing your VA home loan is a major decision, so turn to the professionals at CMG Financial for detailed advice and attractive mortgage packages. They’ve been serving veterans throughout the Chattanooga, TN, area for more than 25 years, providing a broad selection of home loans to people in a variety of circumstances. Visit their website for more on their refinancing options, or call (423) 991-0095 to speak with a loan officer today. For more tips and advice, follow them on Twitter.