IRRRL, VA cash-out or leaving VA: choosing your refinance path
Path 3: leaving VA
At the fork
Refinancing out of VA ends the VA guaranty on that home. You lose VA features such as no monthly mortgage insurance and VA's streamlined IRRRL route later, but you no longer pay a VA funding fee on that loan, and once the VA loan is paid off your entitlement may become eligible for restoration under VA rules. Owners with strong equity sometimes choose this path.
Last reviewed against the primary sources listed below.
Weigh before leaving
- Would the new loan require mortgage insurance?
- Do you plan to buy another home with VA soon?
- Is a VA cash-out a better fit for the same goal?
Choosing a path
Is it worth refinancing a VA loan to conventional?
It can be for owners with substantial equity or who want to free entitlement, but compare total costs, including any mortgage insurance.