VA's two cash-out refinance types and the protections each one carries
When the type changes
Classification
The type depends on the final loan amount compared with the payoff. If fees, the funding fee or a higher amount push the new loan above the payoff, a Type I can become Type II, which brings different protections and disclosures. Ask your lender to recheck the type if the amount changes.
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- Funding fee added to the loan.
- Closing costs rolled in.
- Any increase in the requested amount.
Type questions
Can my VA refinance type change?
Yes, if the final loan amount moves above or below the payoff.
Why does the type matter?
Different protections and disclosures apply.