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Can I use the VA cash out refi to pay back a intrafamily loan?

I purchased a house in Marietta about a year ago using an intrafamily loan. This is my primary home and I have lived in it for a year. As I understand it, a VA cash-out refi can be used for "any" mortgage, lien, etc. against a home. How would I go about having the intrafamily loan recognized by the lender as a qualified loan?
  • September 15 2012 - Marietta
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Answers (5)

Hello, as long as you have a lien against your house you can do a VA CASH loan up to 100% of the value of your home. You need a minimum credit score of 580. We underwrite and fund 100% VA CASH OUT refinance loans in house. If you have any questions regarding your specific situation, feel free to contact me at any time! Best of luck!
  • April 12 2013
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This should not be a problem as long as you disclose any non-arms lenght transactions
  • February 19 2013
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Here is some information on my situation. I purchased the house as a "cash deal" with a family loan. The loan isn't recorded anywhere outside of a promissory note that is "stashed in the mattress". The reason I didn't get a traditional mortgage at the time was I was living in Texas and was planning on moving back to Georgia about a year after the purchase. I am keeping the house in Texas as a rental property, but I did not want to go get a mortgage on the house in Georgia before that since it would have most likely been underwritten as a investment property. The idea was to get moved here, get the house rented in Texas then get a traditional mortgage on the house here (now my primary residence). My credit is 800+ and the LTV would be in the neighborhood of 80%. DTI will be in the neighborhood of 16/26. As for the "family loan", there haven't been any payments made (this was part of the agreement) since it will be a lump sum repayment.

Ideas?

Idea 
  • September 16 2012
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Is the loan on the title to the home?  You can do a cash out refinance to pay it off you really just need to know how much your house would appraise for and the amount of your payoff of intrafamily loan.

As long as you can qualify it should not be too difficult.

Justin Herring
Southeast Mortgage
[contact information removed by Zillow moderator]
  • September 16 2012
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Unless you are exempt from the VA funding Fee you will probably be better off using a conforming loan ( depending on your credit ). Have you made 12 payments and have cancelled checks to prove? What was the purchase price, current loan balance, and how much will it appraise for now? 
  • September 16 2012
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