How to Refinance a VA for a 100% Disabled Veteran

By Don Rafner

If you have a VA loan and you're a veteran who can't work because of a disability, you can still refinance your mortgage. It all depends on the current value of your home and whether your disability income, along with any other income you receive, is high enough to qualify you for your new mortgage payments.

Find and compile the documents you'll need to prove your monthly income and debt levels. These papers include copies of your two most recent disability checks, your two most recent federal income tax returns, your checking and savings account statements and your most recent credit-card and other loan statements. You should also gather copies of statements or checks from other income sources such as Social Security checks or rent checks.

Call your mortgage lender at the phone number listed on the mortgage statement you most recently received. Tell your lender that you are interested in refinancing your existing loan, and that you are currently on disability and unable to work. Remember, you don't have to refinance through the lender who currently services your loan, though it is often easier to do so.

Give your lender the OK to run a credit check on you and any co-borrower. This will give lenders access to your three-digit credit score, a number that represents how well you've managed your money in the past. If you have a high credit score, 720 or above, you'll qualify for the lowest mortgage interest rates. If your score is below 620, you might not qualify for a refinance.

Get a home appraisal, which typically costs about $400. Your lender will require that an appraiser confirm the current value of your home. If your home's value has declined significantly, you may not have enough equity in it to qualify for a mortgage refinance. Your lender will require an appraisal even if your home has recently been appraised by your county.

Send to your lender by fax, mail or e-mail, if possible, the papers from Step 1 that prove your monthly income and debts. If the combination of your disability and additional income is high enough, and your debts low enough, your mortgage lender might approve your mortgage, if your home has appraised at a high enough value and your credit score is good.

Sign the documents provided by your lender that will officially close your refinanced loan. Set a closing date for this to happen.

Refinances can cost $4,000 or more. Make sure that your mortgage payments will drop by enough each month to pay this cost back quickly.

http://www.lenderva.com