How to Refinance From Conventional to VA

By DB Jenkins

The Department of Veterans Affairs (VA) is the federal government's administration responsible for maintaining the welfare and well-being of veterans of the U.S. Armed Services. This administration provides health insurance, disability pay and counseling to veterans. However, it also insures home loans for qualified veterans. These loans typically are more favorable than conventional loans. If you have a conventional mortgage and you are a veteran, you may be eligible to refinance into a VA-insured loan.

Pull your credit report before you approach any VA lender. You can get a free copy at Annual Credit Report. You should also pay for your three-digit FICO---a number between 300 and 850. This represents your credit standing on a spectrum. Scores over 720 are excellent; scores below 600 are poor.

Complete a Certificate of Eligibility. This is a required document for all VA loans. It details your active military service and any previous VA loans you obtained. (See Resource 1 for a blank Certificate.) This document is also known as Form 26-1880.

Research VA lenders. Use the link in Resource 2 to find lenders in your state and near your town. The VA does make direct loans, but you can also apply with a VA-approved private lender. Research both programs so that you have plenty of information to make an educated decision.

Apply at several VA lenders. Provide the loan officers with your completed Certificate of Eligibility, your old (or current) military pay stubs and any other income documents. This will help preapprove your VA refinance application.

Compare all VA loan offers side-by-side. Pay special attention to the types of rates offered (variable, fixed) and the costs of each loan. Choose the loan that best meets your financial needs, not just the loan with the lowest interest rate.

http://www.lenderva.com