Best VA Refinance Mortgage Lenders

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Contributor, Benzinga
August 8, 2023

Quick Look: Best VA Refinance Mortgage Lenders

You’ve served our country, and you deserve the best. The Department of Veterans Affairs distributes benefits to veterans and their dependents, and if you’ve served, you’re eligible for special financial programs — including VA loans.

Refinancing a loan can be the best decision — a VA refinance loan can help you lower your mortgage interest rate or take out some much-needed cash. Benzinga’s done the work to boil down the VA refinance process and recommend mortgage lenders to help you start weighing your options. 

Best VA Refinance Mortgage Lenders 

To find the best rate and terms, contact multiple lenders. Here are Benzinga’s best refinance mortgage companies for veterans and current service members. 

Best for Bank Statement Loans: Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio Non-QM mortgage loans. Angel Oak is licensed in 45 states and offers competitive rates and quick closing times. 

  • Available for purchase, cash-out or rate-term refinance
  • Primary, second home, or investment properties
  • Single family, townhomes, or condos
  • Loan amounts up to $3.5 million
  • No tax return options for self-employed borrowers and real estate investors
  • 1099 income options available
  • Government loan products available (FHA, USDA, VA)
  • Competitive rates on conventional purchase and refinance
  • Flexible down payment options
  • Non-warrantable condos allowed

Best for a Variety of Options: New American Funding

New American Funding offers conventional, proprietary and government-backed mortgages. Its variety of mortgage options make it worth checking out, especially if you have unique financial needs. It also offers options for refinancing and tapping into your home equity. Its loan products aren’t available to New York or Hawaii residents.

New American Funding is also an excellent lender for first-time home buyers. You can opt for an FHA, USDA or VA loan. New American Funding also has educational resources to help you understand the mortgage process. 

The VA loans provided by the bank allow veterans and active service members to achieve home ownership, but the lender is large enough that you can take advantage of other options like cashing out for a refinance, obtaining an energy efficient loan or even a Native American Direct loan. The bank abides by all regulations regarding VA loans, including the certificate of eligibility, good credit and sufficient income.

Best for IRRRL: USAA

USAA is a financial services organization that exclusively serves members and families of the armed forces. It has a reputation for excellent service, and USAA offers IRRRLs with no origination fee. It also covers the appraisal, title and VA funding fee, which lowers your closing costs.

You can view USAA’s IRRRL interest rates on its website, making it easy to comparison shop. USAA doesn’t have an online mortgage option, so you’ll need to call for more information. 

Best for Credit Union Service: Navy Federal Credit Union

Navy Federal Credit Union has more than 8 million members, and it’s been serving members of the armed forces and their families since 1933. It offers VA cash-out refinances, IRRRLs, FHA refinances and more.

Navy Federal Credit Union offers outstanding customer service with representatives available around the clock. 

Best for Education: Veterans First Mortgage

Veterans First Mortgage trains its employees to serve the unique needs of military families. Its loan officers work closely with you to make sure you are satisfied with your refinancing process. Veterans First has served more than 175,000 veteran families over 30 years and has an A+ rating from the Better Business Bureau. 

VA Streamline (IRRRL) Refinance

The Department of Veterans Affairs oversees all VA loan programs, including its refinance programs. Private lenders provide VA loans, and the loans have to comply with VA rules.  

Refinancing is when you replace your current home loan with a new home loan. You should only consider refinancing if the new mortgage puts you in a better financial position. 

One of the VA’s options for refinancing is called the interest rate reduction refinance loan or IRRRL. This type of mortgage improves your financial position when it replaces your current loan with one that has better terms. 

Here are a few of the benefits of an IRRRL:

  • No appraisal needed
  • The ability to roll closing costs into the new mortgage
  • You can choose from any IRRRL lender

You may switch to an IRRRL to secure a lower interest rate or transition from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage. An adjustable-rate mortgage has an interest rate that can increase over time, while a fixed-rate mortgage maintains the same interest rate. 

Cash-Out Refinance

Another option to refinance mortgage loans is a VA-backed cash-out refinance loan. A cash-out refinance loan allows you to replace your current home loan with a new one and take cash out of your home equity. The cash could help you pay off debt, improve your home, pay for school — anything you might need. 

You can use a VA cash-out refinance loan to refinance VA loans and non-VA loans. The amount you can take out in cash depends on the equity you’ve built up in your home. Equity is the difference between how much you owe on your home and how much your home is worth. Let’s say your home is worth $200,000, and you owe $125,000 on your mortgage. In this case, you have $75,000 in equity ($200,000 - $125,000 = $75,000). Your lender can help you determine how much cash you can pull from your equity. 

VA Refinance Eligibility

A VA-approved lender is the best place to refinance your mortgage, but which loan options are best? Your best choice depends on your eligibility — check out the requirements for each refinancing option.

IRRRL Eligibility

To qualify for an IRRRL, you must:

  • Have a VA home loan
  • Currently live in the home or have previously lived in the home you are refinancing
  • Provide the Certificate of Eligibility (COE) used to originally purchase the home
  • If you have a second mortgage, the lender must agree to stay in the second position

You may have to pay a funding fee, but you could roll the fee into your new mortgage. 

Cash-Out Refinance Eligibility

To qualify for a VA-approved cash-out refinance loan, you must:

  • Live in the home you’re planning to refinance
  • Qualify for a COE
  • Meet your lender’s credit and income requirements

The VA provides a COE based on your service history. If you’re active duty, you need to have served for at least 90 continuous days. If you’re a veteran, the service requirements vary upon when and where you served. 

For example, if you served in Vietnam between February 28, 1961 to May 7, 1975, you need to have served for 90 total days. It may be less if you were discharged due to a service-related disability. 

If you served between August 2, 1990 and the present, you must have served for 24 continuous months or the full period you were called for active duty. Again, it may be less if you were discharged due to a service-related disability, a hardship or a reduction in force. 

The best way to determine eligibility is to apply online via the eBenefits portal. 

Choosing a Lender

Choosing the right VA lender is essential. Steer clear of lenders that use high-pressure sales tactics or promise thousands of dollars in cash back. The VA warns that if an offer seems too good to be true, it probably is. 

Look for a lender with a long track record of success with VA loans. IRRRLs have minimal paperwork, but closing is still a process. Cash-out refinances are more involved. In addition to providing your COE, you’ll also need to provide financial information such as:

  • Your pay stubs from the past month
  • W-2s from the past 2 years
  • Your tax returns from the past 1 or 2 years

Your lender will also order an appraisal, which determines the value of your home. 

Regardless of which loan you choose, it’s important to review your terms carefully. Keep interest rates, closing costs and the service you need along the way in mind before you make your final choice. 

Is a VA Refinance Right for You?

Deciding whether or not to refinance can be tough, but after your years of service, you deserve the best. Approach your refinancing decision by evaluating your goals. A VA refinance loan can put more money back in your pocket with a lower interest rate or help you pay off your home faster with a shorter term. Cashing out your equity can be more complicated, but the right lender can provide you with the information to make your best decision.

Frequently Asked Questions


How do I get pre-approved?


First, you need to fill out an application and submit it to the lender of your choice. For the application you need 2 previous years of tax returns including your W-2’s, your pay stub for past month, 2 months worth of bank statements and the lender will run your credit report. Once the application is submitted and processed it takes anywhere from 2-7 days to be approved or denied. Check out our top lenders and lock in your rate today!


How much interest will I pay?


Interest that you’ll pay is based on the interest rate that you received at the time of loan origination, how much you borrowed and the term of the loan. If you borrow $208,800 at 3.62% then over the course of a 30-year loan you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you are looking to refinance you can get started quickly here.


How much should I save for a down payment?


Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you put down, the lower your monthly payment will be and ultimately you will save on interest costs as well. In the event that you are unable to save 20% there are several home buyer programs and assistance, especially for first time buyers. Check out the lenders that specialize in making the home buying experience a breeze.

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