VA's two cash-out refinance types and the protections each one carries
When the fee decides the type
Classification
Because VA counts the financed funding fee in the loan amount, a refinance that would otherwise equal the payoff can become Type II once the fee is added. Paying the fee in cash, or being exempt, can keep it Type I. Ask your lender to classify the loan with and without the fee financed.
Last reviewed against the primary sources listed below.
Ways the type can shift
- Financing the funding fee.
- Financing closing costs.
- A payoff that changes with the closing date.
Type questions
Does being exempt from the funding fee affect the type?
It can, because no fee is added to the loan amount.