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Old 03-10-2017, 09:15 AM
 
327 posts, read 643,868 times
Reputation: 250

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Hi..

My husband and I have moved many times and used his VA home loan benefits. Unfortunately now the funding fee is over $7K which can be rolled into loan with other closing fees.

In our current property we have paid back the fee technically as our interest rate is under 4% and more goes towards the principal.

Most recently we received an offer from a large reputable lender stating we can do a VA cash out Refi with no fee's technically.

How the program works is, for a time period supposedly under a year instead of the current VA rate we would pay a slightly highly rate with no fee's including the big funding fee. Then in less than a year we can go for a VA rate reduction to go back to the prevailing rate with no fee's etc. Might be a risk I know on the back end if rates go up before we can do the rate reduction.

We are intrigued as we wish to do a big back yard project to include a pool and this would be "cheap" money compared to other loan programs.

Sound to good to be true? Of course our property would have to appraise out.

It appears the temporary rate bump would be around 1% or so.

Any suggestions? We see alot of ads for a USA Today company which offers a similar program however their ratings on the web are horrible, company whom contacted us has good ratings that I can see.

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Old 03-10-2017, 10:08 AM
 
3,318 posts, read 7,255,247 times
Reputation: 4095
Stop churning. Do a low-fee 2nd mortgage and pay that off at an accelerated rate.
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Old 03-10-2017, 11:21 AM
 
327 posts, read 643,868 times
Reputation: 250
Quote:
Originally Posted by Pfhtex View Post
Stop churning. Do a low-fee 2nd mortgage and pay that off at an accelerated rate.
Hi Pfhtex..

Two problems there LTV being the biggest, VA will go 100% however worth checking out.

Thanks.
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Old 03-10-2017, 12:50 PM
 
Location: Phoenix, AZ > Raleigh, NC
14,301 posts, read 17,505,128 times
Reputation: 22132
Quote:
Originally Posted by Rudydog1 View Post
Hi Pfhtex..

Two problems there LTV being the biggest, VA will go 100% however worth checking out.

Thanks.
In that case, Ummm, maybe it's possible you shouldn't do the big backyard project and pool until you can actually afford to pay for it?
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Old 03-10-2017, 10:54 PM
 
327 posts, read 643,868 times
Reputation: 250
Quote:
Originally Posted by Jkgourmet View Post
In that case, Ummm, maybe it's possible you shouldn't do the big backyard project and pool until you can actually afford to pay for it?
Actually the issue wasn't if we could afford the project, it was more of where the cheapest money was vs liquidating some of our higher yielding investments and paying capital gains. Although second mortgages still have some tax advantages I did not find any rates cheaper than 5% plus closing costs. Guess time to contact our financial planner. Thanks..
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