Getting your paperwork ready for a VA cash-out refinance
Step 5: net tangible benefit
Prep note
When a VA-backed loan is refinanced, VA requires the lender to show the new loan gives you a net tangible benefit and to give you a comparison of the old and new loans. For a cash-out refinance that increases the balance beyond a set share of value, extra recoupment and disclosure rules apply. Read the comparison carefully before you sign.
Last reviewed against the primary sources listed below.
What to look for
- The new and old balances side by side.
- How long it takes to recoup costs.
- The effect on equity in the home.
Prep questions
What is a net tangible benefit?
A VA test that the refinance leaves you better off, such as through a lower rate, a fixed rate or other listed benefits.