VA Loan Refinance to Conventional??

Question

I'm currently financing my primary residence through a VA Loan. It's a jumbo mortgage ~$1.2M (at 3.25%) and it would likely appraise at $~1.5-1.7M. My family and I are currently looking at purchasing another home (that will likely be another jumbo) and renting out my current home.

I also own my first BRRRR rental property that I'm about two weeks away from refinancing. It's leveraged for $105k and will appraise at $180k.

My thought is that I should refinance my current residence under a conventional loan (even though I won't score the same great rate) to free up my VA Loan for my next home purchase. The VA Loan allows me to throw down very little cash relative the purchase price, so I'd love to take advantage of that.

Here's are my questions:  Am I thinking clearly?  Is this the right way? Or is there something better being that I have a small rental? Etc?

Thanks in advance for any help.

Roger Evans · Answer

@Kris Quinones I have a 3-unit that’s cash flowing $800 monthly. Balance is $228k and the house is worth $320-340k. When you refinance do you have to go off of what the house is worth? Like I couldn’t switch to conventional and have the same 228k balance with a fee or something. I also don’t live in the house anymore.

James Letchford · Answer

@Khemaro Nuon:  A jumbo loan is typically a loan over $1M. In most refinances, as long as your home appraises for enough that your LTV at 80% is equal to (or more than) what you owe, you won't have to come to the table with any cash.

@Juan Ayala:  I ended up keeping my VA Jumbo and not re-financing it out. I have a 3.25% rate that I may never see again. Current rates could jump my payment ~$1K per month in interest.

So, long story short, I analyzed what our plans were and decided that holding the VA jumbo at 3.25% was a smart move.

Juan Ayala · Answer

I am in a very similar situation. What did you end up doing?

VA Loan Refinance to Conventional??

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