Part 5 of the 5-part series “VA Loans: 100 Questions Answered” by Kate Matties-Deiboldt, Sr. Mortgage Advisor serving Clarksville, Fort Campbell & Montgomery County.
Overview
The final article explores refinance options, entitlement calculations and advanced VA loan topics. These answers help you make the most of your benefit across multiple homes and life events near Fort Campbell.
Questions 81-100
81. What is an IRRRL (Interest Rate Reduction Refinance Loan)?
An IRRRL, also called a VA Streamline Refinance, allows you to refinance your existing VA loan to a lower interest rate with minimal documentation. It doesn’t require a new appraisal or income verification in many cases. Your existing loan must be current, and you must benefit from the refinance (usually by reducing the rate or changing from an ARM to a fixed rate).
82. Can I refinance with cash out using a VA loan?
Yes. A VA cash-out refinance allows you to refinance up to 90% (sometimes 100%) of your home’s value to pay off other debts, finance home improvements or convert a non-VA loan to a VA loan. This type of refinance requires a credit check, appraisal and full underwriting.
83. Is an appraisal required for a VA refinance?
It depends. An IRRRL generally does not require a new appraisal, while a cash-out refinance does. If you’re converting from a conventional loan to a VA loan, expect a full appraisal.
84. What is the recoupment rule for IRRRLs?
VA guidelines require the costs of an IRRRL to be recouped within 36 months through savings from the lower rate. The lender calculates recoupment by dividing the total loan costs by the monthly savings. This rule ensures the refinance benefits the borrower.
85. Can I remove or add a spouse on a VA refinance?
Yes. On an IRRRL you may remove anyone whose entitlement was not used on the original loan. To add a spouse, you’d typically need to do a cash-out refinance or a new purchase loan. Consult your lender about your specific circumstances.
86. How often can I refinance a VA loan?
There is no set limit, but you must meet recoupment requirements and demonstrate a tangible benefit each time. Multiple refinances within a short period may raise red flags for lenders and the VA.
87. What are VA loan limits and how do they work?
As of recent changes, there are no loan limits for veterans with full entitlement. You can borrow any amount a lender approves without a down payment, as long as you meet credit and income guidelines. If you have remaining entitlement but not full entitlement (because you still own another VA-financed property), county loan limits apply when calculating how much you can borrow without a down payment.
88. What is bonus entitlement?
Bonus entitlement refers to the portion of entitlement beyond the basic $36,000 guaranty. It allows borrowers to obtain larger loans without down payments. Using entitlement on one property reduces the amount of bonus entitlement available for subsequent purchases.
89. How do I restore my VA loan entitlement?
You can restore entitlement by selling the property and paying off the VA loan in full, or by obtaining a one-time restoration of entitlement if you paid off the loan but still own the property. Contact the VA to request restoration, and provide proof that the loan has been satisfied.
90. Can I assume a VA loan?
Yes. VA loans are assumable if the lender and VA approve the buyer. The person assuming the loan must meet credit and income requirements. When someone assumes your loan, your entitlement may remain tied to the loan unless they are an eligible veteran who substitutes their entitlement.
91. Can a non-veteran assume my VA loan?
Yes, but your entitlement will remain tied to the loan until it is paid off. To free your entitlement, the buyer would need to be an eligible veteran willing to substitute their own entitlement.
92. What happens to my entitlement after an assumption?
If the buyer is not a veteran or does not substitute entitlement, your entitlement remains tied up until the loan is paid in full. This could limit how much you can borrow on another VA loan.
93. Can I buy again with a VA loan after a short sale?
Yes. After a two-year waiting period, you may be able to get another VA loan. Restoring entitlement and re-establishing credit are key factors. Lenders will review your financial recovery and ability to repay.
94. Can I use a VA loan after bankruptcy or foreclosure?
Yes, but waiting periods apply (see Questions 37 & 38). Once the waiting period is over and you have re-established credit, you can use your entitlement again, subject to underwriting requirements.
95. Are there mistakes VA buyers should avoid?
Common mistakes include:
- Skipping the home inspection
- Not understanding the funding fee
- Taking on new debt before closing (which can affect qualification)
- Assuming the VA sets interest rates (rates vary by lender)
- Overlooking residual income requirements
Working with an experienced VA lender and Realtor can help you avoid these pitfalls.
96. Is a VA loan always the best option for veterans?
Not always. While VA loans offer many advantages, there are situations where a conventional or FHA loan may be better—for example, if you have a large down payment or plan to buy an investment property. Compare options with your lender based on your goals.
97. Can I combine a VA loan with down payment assistance?
Yes. Some state and local programs offer down payment or closing cost assistance that can be combined with a VA loan. Requirements vary by program and location. Talk to your lender about what’s available in Tennessee and Kentucky.
98. Are there special benefits for disabled veterans?
Yes. Veterans receiving disability compensation are exempt from the funding fee. Some states offer additional benefits, such as property tax exemptions or lower closing costs. Check with your local county assessor and state veterans affairs office for details.
99. Can I use my VA loan benefit to build a multi-generational home?
Possibly. VA loans can finance up to four residential units, so you could build a duplex or fourplex and house multiple family members. You must live in one unit as your primary residence. Construction VA loans are more complex and may require a different lender.
100. What should I do next if I’m interested in a VA loan?
Start by speaking with a VA-approved lender who knows the local Clarksville and Fort Campbell market. Obtain your Certificate of Eligibility and discuss your budget, credit and goals. With guidance from an experienced team, you can leverage your VA benefit to buy or refinance a home.
Ready to use your VA benefit? Whatever your questions, concerns, or hesitations, I can be your clear guide through the mortgage process. The first step is a quick, no-obligation analysis.
📞 Call or text: (931) 980-9764
✉️ Email: Kate@JustCallKate.com
🌐 Web: www.justcallkate.info
Knowledge is power. Your clear path home — even if you’ve been told no before.
The full 5-part series:
- Part 1: Basics & Eligibility (Questions 1-20)
- Part 2: Down Payment, Credit & Income (Questions 21-40)
- Part 3: Property, Appraisal & Funding Fee (Questions 41-60)
- Part 4: Closing, Occupancy & Interest Rates (Questions 61-80)
- Part 5: Refinance, Entitlement & Advanced Topics (Questions 81-100) (you are here)
Leave a Reply