Lender · Charlotte, NC · Member since 2015 · 124 posts · 22 votes
s it possible to refinance A VA loan to a conventional loan? I currently have one property under VA loan and another property under a FHA loan. I heard and read about a VA loan program that allows you to cash out refinance up to 100% of the homes value. I figured why not refinance The current VA loan to a conventional loan and cash out refinance the FHA to a VA loan since I have a lot of equity in it. But I'm now sure if this is is possible.
Does anyone think this is a good idea? Or knows the pros and cons?
To answer your question, yes you can convert a VA to a Conventional loan. This would mainly be done if a person wanted to restore their entitlement to use on another home purchase. For what you want to do it seems like there is no reason to convert to a conventional loan as you can just do a VA cash out refinance. It's hard to find a conventional loan that will give you 100% cash out, they are out there, but they are strict.
The key thing is which one do you occupy as your primary? The FHA or the VA? To do a VA cash out you must live on that property, FHA kind of follows the same boat for this as well. Depending on how long you living the FHA home, you could MAYBE cash out. I know the rules state the property needs to be your primary residence for 12 months or more prior to application. Potentially you could keep both VA and FHA on their respective home without converting and still being able to cash out. But again depends on which one you are living in and for how long you have resided in both of them.
Lender · Charlotte, NC · Member since 2015 · 124 posts · 22 votes
9y
Nicholas Covington thanks for the feedback. That makes sense now that I'm looking at it. I would have to live in the VA loaned home in order to refinance. In my situation I will not follow through with it.
Are there any banks out there who refinance on a cash out of over 80%LTV?
Cash outs would be based on the appraised value. The % they will cash you out up to varies based on loan program and lender. You can potentially find someone to give you 100% of the appraised value of equity, just have to look around. 100% on a VA loan might be harder to find though.