Refinance out of a VA Loan

[Account Closed]

Hello BP Community,

I'm currently looking at refinancing out of a VA Loan. My loan is only 2.5 years old and I have a great rate on it. My reason for doing this is primarily to get out of the va loan so that I can use it again in the future. I could never afford 20% down on a multi fam and dont want to pay mortgage insurance either. I can pay the 5% dp to reduce the funding fee from 3.3 to 1.6. Also, property values in my neighborhood have gone up so much that I have some confidence that I could meet the 75% ltv ratio on a refinance. And, with rates the way they are, i think this is my best opportunity to make this move.

I do have some concerns, even though rates are great right now, i'd have to pay a full point to meet my current rate, although i'm also interested in paying more than that to reduce my current rate. Only because i figure since i'm doing this, I may as well get a better rate. I wouldn't want to refi again in the future. I know that my savings on .125 would take forever to re-coup vs the points that i'd pay. However, i'm doing the math against the mortgage insurance and the higher rate i'd get if I didn't use a va loan on my next property. Any thoughts on this perspective?

Also, i've had a few lenders tell me that there's no point to get out of my va loan. I might as well save on closing costs and points and the reset of my interest payments and just go conventional or FHA for my next property. although, again, the numbers as far as not getting the best va rate, downpayment, and mortgage insurance just doesn't make sense to me. Am i missing something?

about to pull the trigger but just looking for some thoughts in case there's anything i hadn't thought of.

Thanks all

[Kerry Baird]

I don't see any benefit to refinancing that VA.
This would be the time to move on to the next property, turning the past one into a rental. Instead, you will refinance and have to stay in this house at least one more year as a requirement of a new conventional loan. 
You will likely make more salary in the future, so save up for future down payments. You’ll have to pay for closing costs, doc stamps, funding fee, origination, etc. Then, you have to pay for points to get down to the terrific rate you already have, on a terrific loan. You will also restart the clock on your amortization. Money losing steps.

Instead, I’d be looking to make more money. Side hustle, better job, use GI Bill for more education, take a roomie, or whatever it takes to save up an emergency fund, and then save up your next down payment.  Rent this one out, and every two years until you are sick of it, find the next. Improve it a bit. Do it again. And again.
It is the build up of equity over time that builds a lifetime of wealth, and that is best paid off by tenants. 
I find the juggling of this mortgage to a conventional to be money and time wasting.