Can I refinance a VA loan to a conventional loan?
2010 February 2
I know it is backwards but we have a house here in NC with a VA loan. We want to buy a house when we are stationed in Alaska…and naturally we want to use our VA loan without selling our house in NC.
So can we refinance to a conventional loan and release the VA certificate in order to use it in Alaska?
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Yes. Actually there are times when you can get a better interest rate with conventional loans. You might be able to refinance and get a better rate anyhow.
I believe you can — but you should check with the institutions that you’re dealing with.
It’s my understanding that once you pay off a certain percentage (it’s either 10% or 20%, or something like that) of the principle of the first house that the VA loan sort of becomes a regular loan. But the bank you went through would have all the specifics, so you’ll have to ask them. Each contract has specifics that have to be dealt with, so it’s hard to answer that sort of question here.
Shop around locally for the best rates and terms. Bear in mind that you will have to refinance the VA loan with an investor loan since you no longer live in the home. That will generally require at least 20% equity in the property, the more the better. If you can re-fi before you move, that would be much better, though bear in mind that since you know that you are moving, the bank could treat it as fraud if you don’t reveal this material fact.
Caution: Do NOT contact any of the scam artists that respond to your question with an e-mail address and promises of loans! This forum is rife with loan scams. You will LOSE YOUR MONEY and get NOTHING in return for it!