VA Cash-Out Refinance

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A Great Way for Veterans to Use Their Equity in Their Homes

  • Roll your closing costs into the loan
  • Finance up to 90% of the value of your home
  • Low-to-zero out-of-pocket costs

Today's VA Cash-Out Rates

Keep in mind, these home loan rates are based on certain assumptions and may differ from your specific financial needs.

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Discount points apply, view assumptions for details. Rates valid on:
Wed, Jul 12 2017, 09:49 AM PT and are subject to change without notice.

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For a rate quote, please call a PennyMac Loan Officer at (866) 549-3583.

VA Cash-Out Program

If you’d like to take advantage of your home’s equity to access cash for home improvements, pay off high-interest debt or manage any other expense, a VA Cash-Out loan may be just what you’re looking for. Any qualified veteran homeowner, regardless of whether they have a FHA, USDA or conventional loan, may be eligible for this program.

One of the most the most common reasons that veterans choose a VA Cash-Out loan is for greater flexibility in consolidating debt. For instance, if you’re paying a high interest rate on credit card debt, a VA Cash-Out loan is often a way of paying off that debt at a significantly lower rate. Unlike credit card debt, the interest on your VA Cash-Out loan is tax deductible, which could save you even more.*

Additionally, consolidating your debt at a lower, more manageable rate, can often be the first step toward repairing your credit. Even if you’re consistently making the minimum payments on your nearly maxed-out credit card, your credit score could be suffering due to your outstanding balances.

*Consult a tax adviser for further information regarding the deductibility of interest and charges.

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What is the VA Cash-Out Program?

Veterans who would like to refinance their mortgages into a low rate while getting cash out of the equity in their homes may be eligible for the VA’s Cash-Out Refinance program. While the Department of Veterans Affairs doesn’t lend money directly to veterans, they do guaranty the loans, which allows lenders like PennyMac to offer them directly.

A VA Cash-Out Loan is fundamentally different than a standard home equity loan, which is a second lien against your property. With a VA Cash-Out Loan from PennyMac, you’re essentially replacing your existing mortgage with a new loan that allows immediate access to cash, using your home equity, with easy fixed-rate monthly payments.

If you’re considering a home equity line of credit (HELOC), there are some good reasons to consider VA Cash-Out. For example, if you’re worried that rates may increase in the coming months and years, a fixed-rate VA Cash-Out loan may be preferable to a HELOC with unpredictable variable rates.

Why a VA Cash-Out Loan?

Are you interested in paying off high-interest debt, going back to school or getting a little help managing some other expense? A VA Cash-Out may be your best way to convert your home’s equity into cash for a variety of needs. Many homeowners are surprised to learn how much equity they have in their home and how now may be an opportune time to consider a VA Cash-Out refinance.

Just a few of the ways VA Cash-Out Loans help veterans include:

  • Paying off high-interest debt
  • Converting a non-VA loan to a better rate and term
  • Interest is tax deductible when compared to credit card debt*
  • Eliminating lingering tuition-related debt

*Consult a tax adviser for further information regarding the deductibility of interest and charges.

More About the VA Cash-Out Refinance

Borrowers who already have a VA loan will find the Cash-Out Refinancing process to be relatively similar. Like a VA purchase loan, you will have to go through standard credit and underwriting evaluations. PennyMac typically requires a minimum credit score of 620 for the Cash-Out benefit.

That means that, if you bought a home for $200,000 and it’s now worth $250,000, you may be able to refinance up to $225,000.

The VA Cash-Out Refinance requires that you already have a mortgage on your property. If you own your home free and clear and no longer have a mortgage, you will need to explore other options for getting access to your equity.

A common misconception is that only veterans with current VA loans can get a VA Cash-Out Refinance. The reality is that even if you have a conventional, FHA or USDA loan, a VA Cash-Out Refinance may be an available option for you if you meet the basic requirements. Compared to many other kinds of loans, the VA Cash-Out is often preferable to veteran borrowers because it’s often offered at a lower rate when compared to a conventional cash out loan, and you have the option of repaying the loan over a longer period of time.*

*By refinancing your existing loan, your total finance charges may be higher over the life of the loan.

Am I eligible for Cash-Out Refinancing?

If you were eligible for a  VA Purchase Loan, you probably meet the requirements for a VA Cash-Out Refinance Loan. The basic requirements for a VA Cash-Out borrower include:

  • Honorably discharged veterans, including veterans of the Reserve and National Guard
  • Active duty service members
  • Current Reserve and members of the National Guard (typically 6 years of service is required)
  • Unmarried surviving spouses
  • Commissioned officers of the Public Health and National Oceanic and Atmospheric Administration
  • Any veterans that have not been dishonorably discharged

A Certificate of Eligibility (COE) is required from all VA borrowers, which PennyMac can provide for you. Some eligible veterans may need to provide a valid DD-214, which is your certificate of release or discharge from active duty.

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