VA Cash-Out Refinance: What It Is And How It Works

May 10, 2024

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Veteran couple working on a laptop, possibly discussing real estate or financial matters.

For homeowners with a Department of Veterans Affairs (VA) mortgage loan, the VA also offers cash-out refinance loans. This refinance – or refi – can allow you to tap your home equity so you can pay for home renovations, consolidate debt or just have some extra cash on-hand.

If you’re interested in using your home’s equity, you’ll need to know all the details about how VA cash-out refinances work: whether you’re eligible, how they compare conventional refinances, the pros, the cons and how to apply.

What Is A VA Cash-Out Refinance?

A VA cash-out refinance allows veterans, active-duty servicemembers and surviving spouses who qualify to get a loan for up to 100% of the appraised value of their home.

Loans obtained with the VA program can be used to:

  • Pay off liens and debt
  • Make home improvements
  • Refinance a non-VA loan into a VA loan (which often comes with better terms than a conventional loan)

Essentially, a VA cash-out refinance loan allows you to replace your current mortgage with a government-backed loan or transfer home equity into cash – and apply this cash toward paying off other expenses.