VA Lenders Handbook
The VA lender’s handbook is a guideline set by the VA for companies that originate and fund VA home loans. The VA Lenders Handbook goes into detail about all of the issues involved with obtaining a loan through the VA.
Using the VA Lenders Handbook
The handbook goes into great detail on the technical and financial requirements to complete the process, generally in accordance with the law that created the program and its subsequent regulations. Among 18 chapters in the handbook, some of the topics include:
- Lender Eligibility
- Property Eligibility
Click the link to learn more about the VA Lender's Pamphlet 26-7
Can a VA borrower use a VA refinance loan to get out of a conventional mortgage? Can VA loans refinance conventional or subprime mortgages to a VA loan? The short answer is yes--VA loan rules do permit this type of refinancing. Depending on your needs you may find several options working in your favor.
One type of VA loan refinancing is intended only to be used to refinance existing VA mortgages. These are known as VA Streamline Refinancing loans and they give the borrower an option to refinance an existing VA loan with no VA-required credit check or appraisal. The original credit qualifying information and appraisal is used to process the new loan.
With VA Streamlines, money back is permitted to come to the borrower as a result of the refinance. That means there’s no need for a new credit check or appraisl, though the lender is always free to require a new credit check, an appraisal, or both.
Some lenders choose to require the credit check and/or appraisal, others do not.
VA Cash-Out Refinancing is different--it permits cash back to the borrower, requires a new appraisal and credit check, and can be done for any mortgage--VA, FHA, conventional, subprime, etc.
What advantages does refinancing into a VA mortgage have? For one thing, the Department of Veterans Affairs does not permit lenders to penalize a borrower for early payoff of a VA loan, regardless of whether it’s a new purchase mortgage, Streamline Refinance or Cash-Out Refinance loan. You can make larger-than-needed payments, shorten the amount of time spent paying off the loan, and save money over the lifetime of the loan with no penalty whatsoever.
For some types of borrowers, this can be a real help--making bigger payments, paying off early, and settling into a paid-off home is a realistic financial goal thanks to the VA refinance options listed here.