subject: Veterans And The Rising Cost Of Living [print this page] Usually, one can count on the cost of living rising each year. Unfortunately, VA benefits do not always increase along with the cost of living. Disability benefits for veterans do rise each year, but is it enough to cover the cost of living? This is the predicament in which hundreds of thousands of veterans find themselves every year.
From 2007 to 2008, VA disability payments rose by approximately five percent. This is less than the rate of inflation estimated in this time. People find different ways to deal with this shortage in income, including restructuring their finances using VA loan.
There are a couple of different refinancing options that can help people save money each month. Currently, the VA offers a rate/term refinance, a cash-out refinance, and an Interest Rate Reduction Refinance Loan (IRRRL).
A rate/term refinance be used to refinance an existing mortgage or consolidate mortgages without receiving any additional cash back in order to obtain a lower interest rate and/or lower monthly payments.
A cash-out refinance can be used to turn equity into cash that can be used to consolidate other debts or cover expenses. This is an effective way to reduce monthly costs.
An IRRRL can be used by those who already have a VA loan to make changes such has interest rate or length of term in order to achieve a lower monthly payment.
A VA home loan has many benefits that other loans do not. Regardless of how much is borrowed, the VA does not require any mortgage insurance, which can save the homeowner hundreds of dollars each month.
Also, the VA allows applicants to finance more of their home's value than other types of home loans. So, if the home's value has depreciated since the original mortgage and is preventing the homeowner from obtaining new financing, a VA loan may be used to refinance the home at a lower interest rate.
For those wishing to receive cash back through a mortgage refinance, the VA recently began allowing applicants to cash out up to 100% of their home's value. Though most lenders still only allow up to 90%, this is still higher than any other legitimate type of mortgage available in today's market.
A debt consolidation refinance can help people who have a lot of high interest revolving debt because it lowers monthly costs and also makes the interest tax deductible since the debt is now part of the mortgage.
The Interest Rate Reduction Refinance Loan is a benefit available to those who currently have a VA home loan. This program is used to take advantages of changes in the market without any additional cash back to the homeowner. This program can be used to obtain a lower interest rate, change the term of a loan, or to switch from an ARM to a fixed rate mortgage. Sometimes referred to as a streamline option, this option does not require an appraisal, income, or asset verification.
A VA loan refinance could help many veterans lower their expenses in order to live more comfortably despite the rising cost of living. To obtain more information about these loan programs, contact a reputable VA loan specialist today.
