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Refinance Your Home Mortgage through the VA: A Good Option for Bad Credit

Refinancing your home mortgage through the VA is a great option for service members, veterans, and surviving spouses with bad credit. This lending option is easy to qualify for and can help improve your credit over time.

Armed forces veterans, as well as current active duty service members and veterans’ surviving spouses have a great option when they are interested in refinancing their current home mortgage. The Veterans Administration offers special VA mortgage loans and VA mortgage refinance loans to eligible parties, despite bad credit. Like many military lending options, these loans are given to military members and vets as a way to say “thank you” for your service and sacrifice.

Bad Credit Qualifications

Military members, veterans and the surviving spouses of veterans often encounter situations of bad credit due to the stresses of military life. Deployment, war, and separation from loved ones can cause finances to take a bad turn and result in low credit scores as an occupational hazard. Whether your bad credit stems from such an instance, or from other circumstances such as a spouse’s job loss, getting a VA mortgage refinance is still possible.

In order to qualify for the refinance loan, you generally need to only prove your military service. If you bought your home using a VA mortgage loan, then even that is not needed. Military service can be proven through current military ID, discharge papers, military death certificate or by completing a DD-214 form.

What a Refinance Will Get You

The purpose of getting a refinance loan for your current mortgage is usually pretty simple: by re-borrowing the money that you used to purchase your home and paying off your original loan, you can qualify for lower monthly payments and/or a lower interest rate. In the case of bad credit, even if you cannot qualify for a lower interest rate on your refinance loan, the lowered payments can go a long way in helping you keep your bills on track and get your credit into a healthier state.

Bad credit is tricky, but the simple requirements for VA loans can help you out. If you are able to lower your payment, you may be able to raise your credit score over time. Then, in a few years you can take another VA refinance loan and lower your interest rate as well.

Using a VA Refinance for Cash

Another reason that people with bad credit may want to consider a VA refinance loan is to get cash out of their home’s equity. That is, if you have owned your home for a while and have paid off a substantial amount of its value, you can use the refinance loan to “Cash Out” that value in amounts up to 90% of the home’s total worth. Basically, you can get the cash you paid in your mortgage back through this lending option and then use that cash to pay other bills or invest in home improvements.

Again, in situations with bad creditBusiness Management Articles, using the VA refinance option can help you to get your finances back on track through a loan with simple qualifications. The cash you receive through the refinance can again go towards the overall improvement of your credit score.

Taking Time to Make a Choice

Deciding to refinance your home mortgage through the VA or any other financial institution is not a simple choice to make. It is important that you speak to VA lending professionals as well as other service members about your options and what is best for your financial future. Make sure that you find a certified VA lender who is willing to offer counsel and work with bad credit.

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Devora Witts is a certified loan consultant who helps people get approved for Loans for People with Bad Credit and Bad Credit Mortgage Loans. To get aid with your financial situation you can visit her at

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