Net Tangible Benefit Standards To Cash-Out Refi VA Loans

Net Tangible Benefit (NTB) standards apply to all cash-out refinancing VA backed loans. The standards consist of three things: a NTB test, Loan Comparison, and Home Equity Disclosure. This blog post is for all the veterans, reservists, and active duty families we’ve helped get into a new home before. Please note that this information is for information purposes only and is subject to change.

NTB Test for Cash-Out Refinancing VA Loans

This requirement is met if any one of the following is satisfied by the refi loan, according to the Department of Veterans Affairs:

  • The new loan eliminates monthly mortgage insurance.
  • The loan term of the new loan is less than the loan term of the loan being refinanced.
  • Interest rate of the new loan is less than the interest rate of the loan being refinanced.
  • The monthly (principal and interest) payment of the new loan is less than the monthly.
    (principal and interest) payment of the loan being refinanced.
  • The Veteran’s monthly residual income is higher as a result of the new loan.
  • The new loan is used to payoff the Veteran’s interim construction loan.
  • The new loan LTV is equal to or less than 90 percent of the reasonable value of the
    home.
  • The new loan is a refinance of an adjustable-rate mortgage to a fixed-rate mortgage.

Loan Comparison Disclosure for Cash-Out Refinancing VA Loans

Your lender has to give you a comparison of the new loan to the existing loan being refinanced. Plus, they have to generate two loan
comparison disclosures. One of the loan comparison disclosures has to be within 3 business days from the initial date of the loan. Then, you have to certify receipt of both disclosures.

Home Equity Disclosure for Cash-Out Refinancing VA Loans

Your lender also has to let you know exactly how much home equity is being removed from your home with the new loan within 3 business days from
the initial date of the loan application and at loan closing. The disclosure also has to explain how this removal of equity could affect the sale or refinance of the home down the road. Then, you have to certify receipt of the disclosure.

To learn about zero down loan limits for VA loans specific to New Mexico, check out our complimentary post.

ARE YOU LOOKING FOR REAL ESTATE IN NORTHERN NEW MEXICO?

If you’re interested in moving to or within Northern New Mexico, contact Coldwell Banker Headin’ Home Realty for all the best listings and most up-to-date information. We are your Angel Fire area experts. Our talented, helpful real estate agents in Angel Fire specialize in residential homes, commercial buildings, condos, vacant lots, and ski properties. We’d love to help you find property with ski in ski out access in the Angel Fire, Eagle Nest, Red River, Mora, Colfax County, Taos, and the Taos Ski Valley areas.

Reach us by telephone at 1-575-377-1192 or by email. Check out our online listings from the comfort of your home. View virtual tours of Angel Fire real estate. You can also just swing in and see us! We are located right in the heart of Angel Fire, in the Mountain View Mall next to Lowes Grocery Store.

Don’t forget to find us on Facebook for the latest information on Angel Fire property listings! So, whether you are looking for ski property, land, or a mountain home, we are eager to help make your dreams come true!

 

Leave A Comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Find Your Dream Home Now:

Calculate Your Mortgage Payments!