Refinancing a VA mortgage can potentially lower a monthly payment, change the interest rate structure, shorten the loan term, or allow a California Veteran to access home equity. But refinancing should not be viewed simply as a search for a lower interest rate.

The more important question is:

Does the new VA loan improve the Veteran's financial position enough to justify the costs, new loan term, and changes in monthly payment?

California Veterans have several factors to evaluate before refinancing, including whether the existing loan is VA backed, whether an Interest Rate Reduction Refinance Loan (IRRRL) or VA cash out refinance is appropriate, closing costs, break even period, equity, interest savings, loan term, occupancy, and future plans for the property.

The Department of Veterans Affairs currently recognizes both IRRRLs and VA backed cash out refinance loans, but they serve different purposes and have different requirements. 

Start With the Reason for Refinancing

Before comparing interest rates, identify the actual objective.

A California Veteran might be considering refinancing to:

• Reduce the interest rate
• Lower the monthly principal and interest payment
• Convert an adjustable rate mortgage to a fixed rate
• Shorten the loan term
• Reduce long term interest
• Refinance a non VA mortgage into a VA loan
• Access home equity
• Consolidate qualifying debt
• Fund home improvements
• Change the structure of the existing mortgage

Each objective can point toward a different refinance strategy.

For example, a Veteran with an existing VA mortgage who simply wants a lower rate may consider an IRRRL.

A Veteran who wants to refinance a conventional mortgage into a VA loan or take cash from home equity may need to consider a VA backed cash out refinance instead. 

The first decision should therefore be:

What problem am I trying to solve with the refinance?

IRRRL vs VA Cash Out Refinance

The two major VA refinance structures should not be treated as interchangeable.

VA IRRRL

An IRRRL is a VA to VA refinance. It refinances an existing VA guaranteed loan on the property.

Its primary purpose is generally to reduce or stabilize the interest rate and payment.

VA guidance states that an IRRRL:

• Must refinance an existing VA loan
• Reuses the entitlement originally used
• Does not permit cash to the borrower
• Generally does not require an appraisal
• Generally does not require a full credit underwriting package
• Requires the Veteran to certify prior occupancy rather than current occupancy in the same way as a purchase loan 

VA Cash Out Refinance

A VA cash out refinance is broader.

It can potentially be used to:

• Take cash from home equity
• Refinance a non VA mortgage into a VA backed loan
• Pay off other liens
• Accomplish other permitted financial objectives

A VA cash out refinance requires an appraisal and full credit underwriting. The Veteran must also meet VA and lender requirements for credit, income, and occupancy. 

This difference should be established before comparing offers.

Decision Factor 1: Your Current Interest Rate

The first numerical comparison is your existing mortgage rate versus the proposed refinance rate.

Suppose a California Veteran currently has:

Existing rate: 7.00%

Proposed rate: 6.25%

That appears attractive.

But the rate difference alone does not determine whether refinancing makes financial sense.

You also need to calculate:

Current principal and interest payment

New principal and interest payment

Closing costs

New loan balance

Remaining loan term

Expected time in the property

A 0.75 percentage point reduction could produce meaningful savings, but the value of those savings depends on how long the Veteran keeps the new mortgage.

Decision Factor 2: Calculate the Break Even Period

One of the most useful calculations before refinancing is the break even period.

The basic formula is:

Break Even Period = Net Refinance Costs ÷ Monthly Savings

For example:

Refinance costs: $6,000

Monthly principal and interest savings: $250

The calculation is:

$6,000 ÷ $250 = 24 months

The refinance would take approximately 24 months to recover those costs through the monthly payment reduction.

If the Veteran expects to keep the property and new mortgage for substantially longer than 24 months, the transaction may have a stronger economic case.

If the Veteran expects to sell within a year, the same refinance may make much less sense.

VA Has Specific Recoupment Rules

For certain VA refinance transactions, the VA has specific rules governing how quickly certain refinance costs must be recovered.

For VA to VA Type I cash out refinances, VA guidance states that certain loan fees, expenses, and closing costs must have a fee recoupment period of no more than 36 months. The calculation divides allowable costs by the reduction in monthly principal and interest payment. 

The VA also has specific recoupment requirements for IRRRLs.

This is important because a lender should not evaluate a refinance simply by saying:

"Your payment will be lower."

The Veteran should understand:

How much does the transaction cost?

How much does the payment fall?

How long does it take to recover the costs?

Decision Factor 3: Closing Costs

Closing costs can materially change the economics of refinancing.

Potential expenses can include:

• Lender fees
• Title expenses
• Recording charges
• Appraisal costs where applicable
• Discount points
• Prepaid items
• Escrow funding
• VA funding fee where applicable

The VA warns Veterans to consider closing costs carefully when refinancing because they can add thousands of dollars to the transaction. 

A lower interest rate does not automatically mean a better refinance.

For example:

Option A

Rate: 6.50%

Costs: $3,000

Option B

Rate: 6.25%

Costs: $10,000

Option B may eventually produce more savings, but the Veteran needs to determine how long it takes to recover the additional $7,000 cost.

Decision Factor 4: Lender Credits vs Discount Points

California Veterans should also compare whether the proposed refinance uses:

Discount points

or:

Lender credits

Discount points generally increase upfront costs in exchange for a lower interest rate.

Lender credits can reduce upfront costs but may result in a higher interest rate.

The correct comparison should therefore consider the entire loan structure.

For example:

Option A

6.50% rate

$3,000 closing costs

Option B

6.25% rate

$8,000 closing costs

The question is not simply:

"Which rate is lower?"

It is:

"Which option produces the better financial outcome over the period I expect to keep the mortgage?"

VA guidance permits certain fees and charges, including up to two discount points, to be included in an IRRRL subject to applicable requirements. 

Decision Factor 5: New Loan Balance

A refinance can increase the new loan balance when costs are financed.

For example:

Existing mortgage balance: $450,000

Refinance costs financed: $8,000

New loan balance: approximately $458,000

The Veteran may achieve a lower interest rate and payment while simultaneously increasing the amount owed.

That does not necessarily make the refinance a bad transaction.

But the additional principal needs to be included in the analysis.

Ask:

How much additional debt am I taking on?

How much interest will I pay on that additional amount?

How quickly will the savings offset it?

Decision Factor 6: Remaining Loan Term

A lower monthly payment can sometimes be misleading.

Suppose a Veteran has:

25 years remaining

on the existing mortgage.

A refinance creates a new:

30 year loan

The new payment could be lower because the balance is being spread over a longer period.

But the Veteran could potentially pay interest for five additional years.

That is why monthly payment should never be the only metric.

Compare:

Monthly payment

Total interest

Loan term

Principal balance over time

Total refinance costs

A refinance that lowers the payment but substantially increases the total interest expense may not accomplish the Veteran's actual financial objective.

Decision Factor 7: Consider a Shorter Loan Term

Some Veterans may want to refinance into a shorter term.

For example:

Existing: 30 years

New: 20 years

or:

Existing: 30 years

New: 15 years

A shorter term can potentially reduce total interest substantially.

But the monthly payment can increase significantly.

The VA itself warns that shortening the term can result in a much higher monthly payment even when the interest rate falls. 

A California Veteran should therefore evaluate both:

Monthly affordability

and:

Long term interest savings

A shorter mortgage is only beneficial if the higher payment remains comfortably manageable.

Decision Factor 8: Existing VA Loan or Non VA Loan?

This is one of the first eligibility questions to answer.

If the existing mortgage is already VA backed, an IRRRL may be available if the applicable requirements are satisfied.

If the existing mortgage is conventional, FHA, or another non VA loan, an IRRRL is not the appropriate VA refinance because an IRRRL must refinance an existing VA loan.

A VA cash out refinance may potentially allow a Veteran to refinance a non VA mortgage into a VA backed loan, subject to eligibility and lender requirements. 

This distinction can eliminate unsuitable refinance options immediately.

Decision Factor 9: Your Home's Current Value

For a cash out refinance, property value becomes especially important.

Suppose a California Veteran owns a home with:

Estimated value: $800,000

Current mortgage: $500,000

The Veteran has approximately:

$300,000 gross equity

But gross equity is not necessarily the same as available cash out.

The lender must determine the eligible loan amount based on VA requirements, appraisal, existing liens, entitlement, and underwriting.

The VA states that a cash out refinance requires an appraisal. 

A higher property value can therefore materially affect the refinance structure.

Decision Factor 10: Your Equity Position

Before taking cash out, calculate:

Home Value − Mortgage Balance = Gross Equity

For example:

$900,000 − $550,000 = $350,000

That does not mean the Veteran should withdraw $350,000.

The question should be:

How much equity should I actually convert into debt?

Taking cash out increases the mortgage balance.

If the cash is being used for a productive purpose, the economics may be different from using the proceeds for short term spending.

Decision Factor 11: What Will You Do With the Cash?

A cash out refinance should have a specific purpose.

Potential uses can include:

• Home improvements
• Debt consolidation
• Education expenses
• Major financial needs
• Other permitted uses

The VA describes cash out refinancing as a way to access home equity for purposes such as paying debt, paying for school, or making home improvements. 

California Veterans should calculate the cost of converting equity into mortgage debt.

For example, if a Veteran takes:

$75,000 cash out

at a mortgage rate of:

6.50%

the cash is not free.

It becomes part of the mortgage obligation.

The correct comparison is therefore:

Cost of refinance + cost of additional borrowing vs financial benefit of using the cash

Decision Factor 12: Debt Consolidation

Debt consolidation can make a refinance look attractive because mortgage rates can be lower than rates on certain unsecured debts.

For example:

Credit card debt: $40,000

Mortgage rate: 6.50%

The Veteran may consider converting the higher cost debt into mortgage debt.

But there is an important tradeoff.

Credit card debt may have a shorter repayment horizon.

Adding it to a 30 year mortgage can reduce the monthly payment while potentially extending the period over which the debt remains outstanding.

The Veteran should compare both:

Monthly payment savings

and:

Total interest cost

Decision Factor 13: Credit Profile

An IRRRL generally has less extensive underwriting than a cash out refinance, but lender requirements can vary.

VA guidance states that IRRRLs generally do not require a credit underwriting package, while cash out refinances require full credit information and underwriting. 

For cash out refinancing, California Veterans should expect the lender to evaluate:

• Credit history
• Income
• Debt obligations
• Assets where applicable
• Property value
• Occupancy
• Loan structure

The VA notes that lenders may impose additional requirements beyond VA standards. 

Decision Factor 14: Your Current Income and DTI

For a cash out refinance, the borrower's financial profile matters significantly.

The Veteran should review:

Gross monthly income

Monthly debt

Housing payment

DTI

Residual income

Credit history

A refinance that looks attractive mathematically may not work if the new loan creates an underwriting issue.

The lender needs to determine whether the proposed loan meets applicable VA and lender requirements.

Decision Factor 15: Occupancy

Occupancy rules differ between refinance types.

For an IRRRL, the Veteran generally certifies that they previously occupied the property.

For a cash out refinance, the Veteran or qualifying spouse of an active duty servicemember must certify the intent to occupy the property. 

This distinction matters for California Veterans who have moved, converted a property to a rental, or are considering relocation.

Do not assume the occupancy rules are identical for every VA refinance.

Decision Factor 16: VA Funding Fee

The funding fee should be included in the refinance comparison.

The VA currently lists the IRRRL funding fee at:

0.5%

For VA cash out refinances, the current listed rates are:

2.15% for first use

3.3% after first use

subject to applicable exemptions. 

For example, on a hypothetical:

$500,000 cash out refinance

a 2.15% funding fee would be:

$10,750

before considering whether the borrower qualifies for an exemption.

That is a meaningful cost.

The Veteran should know whether the funding fee applies before comparing refinance offers.

Decision Factor 17: Are You Exempt From the Funding Fee?

Certain Veterans are exempt from the VA funding fee.

The VA lists qualifying circumstances that can include receiving VA disability compensation or meeting other specified eligibility conditions. 

If you believe you qualify for an exemption, confirm the status with the lender and VA before calculating the final refinance cost.

A funding fee exemption can materially change the economics of a refinance.

Decision Factor 18: California Property Taxes and Escrow

California property taxes and insurance can affect the total monthly housing payment.

When comparing refinance offers, do not look only at:

Principal + Interest

Also review:

Property taxes

Homeowners insurance

Mortgage insurance if applicable

HOA dues

Other recurring property costs

Some of these expenses may not change materially when refinancing.

That means the true monthly savings could be much smaller than the difference in principal and interest payments initially suggests.

Decision Factor 19: Mello Roos and Special Assessments

Certain California properties may have Mello Roos or other special assessments.

These costs can affect the homeowner's overall monthly housing expense.

They may not disappear because the mortgage is refinanced.

For a Veteran comparing affordability, the correct analysis should therefore include the full housing obligation rather than focusing exclusively on the mortgage rate.

VA guidance also specifically recognizes taxes, including Mello Roos, and certain prepaid expenses in its refinance cost calculations. 

Decision Factor 20: How Long Will You Keep the Home?

This may be the most important strategic question.

Suppose refinancing costs:

$7,500

and saves:

$300 per month

Break even:

$7,500 ÷ $300 = 25 months

If you expect to keep the mortgage for:

7 years

the refinance may have time to produce substantial savings.

If you expect to sell in:

12 months

the economics are much less attractive.

Your expected holding period should be part of the refinance decision from the beginning.

Build a Refinance Comparison Table

California Veterans should compare offers using the same assumptions.

This example demonstrates why a lower rate does not automatically make the refinance superior.

The new loan balance and longer term also matter.

Compare Total Interest, Not Just Payment

Suppose a Veteran has:

Current balance: $500,000

Current remaining term: 25 years

Current rate: 7.00%

Now compare a refinance at:

6.25%

but with a new:

30 year term

The payment may fall significantly.

However, the Veteran is restarting the amortization schedule.

The lender should provide amortization information so the Veteran can compare the total interest over the expected holding period.

The relevant question is not:

"How much lower is my payment?"

It is:

"How much will this refinance actually save me after accounting for costs and the new loan term?"

The 30 Year Reset Problem

Restarting a mortgage at 30 years can be one of the biggest hidden issues in refinance decisions.

Suppose you have already paid your mortgage for eight years.

You refinance into a new 30 year loan.

You have effectively extended the repayment timeline.

The new payment may be lower.

But you may pay interest for a longer period.

One way to address this is to compare:

New 30 year loan

against:

New loan with a term closer to your remaining term

For example:

Current remaining term: 22 years

Compare:

22 year refinance

with:

30 year refinance

The shorter loan may produce a higher payment but lower total interest.

IRRRLs Have Specific Benefit Requirements

An IRRRL is not simply a generic rate and term refinance.

VA requirements are designed to ensure the refinance provides a qualifying benefit.

VA guidance includes specific requirements involving seasoning, payment history, and recoupment, with certain exceptions depending on the transaction. 

This means California Veterans should ask the lender:

What specific VA benefit does this IRRRL provide?

Possible objectives can include:

• Lowering the interest rate
• Reducing the monthly principal and interest payment
• Moving from an ARM to a fixed rate
• Shortening the loan term under qualifying circumstances

The exact benefit should be documented.

ARM to Fixed Rate Can Change the Decision

A California Veteran with an existing VA adjustable rate mortgage may consider refinancing into a fixed rate.

The VA specifically recognizes that an IRRRL can refinance an existing VA ARM into a fixed rate, even though the interest rate could increase in the process. 

That is an important point.

A refinance does not always need to produce a lower rate to potentially make sense.

A Veteran may accept a higher initial rate in exchange for:

Payment stability

Protection from future rate adjustments

Long term predictability

The decision should therefore consider both rate and risk.

Decision Factor 21: Interest Rate Risk

For California Veterans with an ARM, compare:

Current ARM rate

Current fully indexed rate

Index

Margin

Next adjustment date

Periodic caps

Lifetime cap

Expected payment changes

against:

New fixed rate

The fixed rate may provide greater certainty even if the initial payment is not dramatically lower.

This is a risk management decision as much as a rate decision.

Decision Factor 22: Future Interest Rates

No borrower can know exactly where mortgage rates will be several years from now.

Therefore, avoid building a refinance decision around a guaranteed prediction.

Instead, evaluate scenarios.

Scenario A

Rates remain high.

Scenario B

Rates decline.

Scenario C

Rates remain roughly unchanged.

Then ask:

Would the refinance still make sense under each scenario?

A strong refinance decision should not depend entirely on one rate forecast.

Decision Factor 23: Homeownership Timeline

California Veterans should consider whether they expect to:

• Stay in the property
• Sell within several years
• Relocate
• Retire
• Convert the home to a rental
• Purchase another property

For example, a Veteran planning to relocate in two years should be much more focused on upfront refinance costs and break even than a Veteran planning to remain in the home for 15 years.

The same refinance offer can therefore be attractive for one borrower and unattractive for another.

Decision Factor 24: Compare Multiple Lenders

The VA itself encourages Veterans to contact multiple lenders because terms and fees can vary. 

Do not compare lenders only by advertised interest rate.

Compare:

Interest rate

APR

Discount points

Lender credits

Origination charges

Other closing costs

Funding fee

Estimated loan balance

Monthly payment

Break even period

Two lenders can advertise the same rate while offering materially different costs.

Be Careful With "No Cost" Refinancing

A "no cost" refinance does not necessarily mean the transaction is free.

Costs may be:

Rolled into the loan

or:

Offset through lender pricing

or:

Reflected through a higher interest rate

The VA notes that an IRRRL can be structured without money out of pocket by including eligible costs in the new loan or using a rate structure that allows the lender to pay costs. 

The Veteran should ask:

Where did the closing costs go?

That question can reveal the actual economics of the offer.

Example: Two California Refinance Offers

Suppose a Veteran has a $500,000 mortgage.

Offer A

Rate: 6.50%

Costs: $3,000

Monthly savings: $120

Break even:

$3,000 ÷ $120 = 25 months

Offer B

Rate: 6.25%

Costs: $9,000

Monthly savings: $200

Break even:

$9,000 ÷ $200 = 45 months

Offer B has the lower rate.

But Offer A reaches break even much sooner.

If the Veteran expects to move within three years, Offer A could potentially be more attractive.

If the Veteran expects to keep the mortgage for 15 years, Offer B may deserve more consideration.

The correct answer depends on the holding period and total cost.

Common California VA Refinance Mistakes

Mistake 1: Refinancing Only Because the Rate Is Lower

A lower rate does not automatically mean lower total cost.

Mistake 2: Ignoring Closing Costs

Costs can eliminate the benefit of a rate reduction.

Mistake 3: Looking Only at Monthly Savings

A lower payment can result from extending the loan term.

Mistake 4: Restarting a 30 Year Loan Without Comparing Alternatives

A new 30 year term can increase the total interest paid.

Mistake 5: Confusing IRRRL With Cash Out

They have different purposes and requirements.

Mistake 6: Assuming an IRRRL Can Refinance a Conventional Loan

An IRRRL must refinance an existing VA loan. 

Mistake 7: Ignoring the Funding Fee

The applicable funding fee can materially affect refinance costs. 

Mistake 8: Taking Cash Out Without a Clear Purpose

Equity becomes additional mortgage debt.

Mistake 9: Ignoring Property Value

Property value is especially important for cash out refinancing.

Mistake 10: Comparing Lenders Only by Rate

Fees, credits, points, and loan structure matter.

Mistake 11: Assuming "No Cost" Means Free

The costs may simply be incorporated elsewhere in the transaction.

Mistake 12: Ignoring the Break Even Period

A refinance that takes too long to recover its costs may not fit a short ownership horizon.

A California VA Refinance Decision Framework

Use this sequence before deciding.

Step 1: Identify the Existing Loan

Is it:

VA

Conventional

FHA

Other

Step 2: Define the Objective

Do you want:

Lower payment?

Lower rate?

Fixed rate?

Shorter term?

Cash out?

Debt consolidation?

Step 3: Determine the Correct VA Refinance

Existing VA loan:

Consider IRRRL

Existing non VA loan or cash out objective:

Consider VA cash out refinance

Subject to applicable requirements.

Step 4: Calculate the New Loan

Determine:

New balance

Interest rate

Term

Payment

Funding fee

Closing costs

Step 5: Calculate Break Even

Net refinance costs ÷ monthly savings

Step 6: Compare Total Interest

Do not stop at monthly payment.

Step 7: Evaluate Your Timeline

How long will you keep the home?

Step 8: Review Your Equity

Especially important for cash out.

Step 9: Review Underwriting

Confirm income, credit, DTI, occupancy, and other applicable requirements.

Step 10: Compare Lenders

Evaluate the complete loan estimate, not just the advertised rate.

A Practical Refinance Checklist for California Veterans

Before signing refinance documents, ask:

1. What is my current interest rate?
2. What is my current principal balance?
3. How many years remain?
4. What is my new interest rate?
5. What is my new loan balance?
6. What is my new loan term?
7. What is my new principal and interest payment?
8. What are all closing costs?
9. Is the VA funding fee applicable?
10. Am I eligible for a funding fee exemption?
11. Are lender credits being provided?
12. Am I paying discount points?
13. What is my break even period?
14. How much interest will I pay over my expected holding period?
15. Am I restarting a 30 year mortgage?
16. Can I refinance into a shorter term?
17. Is my existing mortgage VA backed?
18. Is an IRRRL available?
19. Would a cash out refinance better accomplish my objective?
20. What will my home be worth?
21. How much equity will remain after refinancing?
22. What will I use the cash out proceeds for?
23. How will the refinance affect my DTI?
24. What occupancy requirement applies?
25. What happens if I sell the property sooner than expected?
26. Have I compared multiple lenders?
27. What is the APR?
28. Where are the refinance costs being paid?
29. Does the new loan provide a measurable financial benefit?
30. What is the total financial benefit over my expected ownership period?

Final Thoughts

A VA refinance should be evaluated as a financial decision, not simply a rate shopping exercise.

For California Veterans, the first step is determining the objective.

If the existing mortgage is already VA backed and the goal is to improve the rate or payment, an IRRRL may be the appropriate structure. VA guidance confirms that an IRRRL is a VA to VA refinance and generally does not require an appraisal or full credit underwriting package. 

If the Veteran wants to access equity or refinance a non VA mortgage into a VA backed loan, a VA cash out refinance may be more appropriate. That transaction requires an appraisal and full credit underwriting. 

From there, the decision should focus on the numbers.

Current rate

New rate

Current balance

New balance

Closing costs

Funding fee

Monthly savings

Break even period

Loan term

Total interest

Home value

Equity

Expected time in the property

A lower monthly payment is useful, but it is not enough by itself.

A refinance costing $8,000 and saving $200 per month has a very different economic profile from one costing $3,000 and saving the same amount.

Likewise, refinancing into a new 30 year mortgage may lower the payment while extending the repayment period.

California Veterans should also consider whether they are exchanging an adjustable rate for a fixed rate. The VA recognizes that an IRRRL from an existing VA ARM to a fixed rate may involve a higher interest rate, meaning the benefit can sometimes be payment stability rather than a simple rate reduction. 

The strongest refinance decision is therefore the one that aligns the loan structure with the Veteran's actual financial objective and expected time in the property.

Before refinancing, calculate the break even period, compare multiple lenders, review the complete costs, and determine what the new loan will accomplish over the time you realistically expect to keep it.

A lower rate is a reason to investigate a refinance.

It is not, by itself, a reason to refinance.

Frequently Asked Questions

Should California Veterans refinance when mortgage rates fall?

Not automatically. The Veteran should compare the new rate with the current rate, calculate closing costs and monthly savings, determine the break even period, and consider how long the mortgage will be retained.

What is the VA IRRRL?

The Interest Rate Reduction Refinance Loan is a VA to VA refinance designed generally to reduce or stabilize the interest rate and payment on an existing VA loan. 

Can an IRRRL refinance a conventional mortgage?

No. An IRRRL must refinance an existing VA guaranteed loan on the property. 

Can a VA cash out refinance refinance a conventional loan?

Potentially. The VA states that a VA backed cash out refinance can be used to refinance a non VA mortgage into a VA backed loan, subject to applicable eligibility, underwriting, appraisal, and occupancy requirements. 

Does an IRRRL require an appraisal?

Generally, no. VA guidance states that an appraisal is not required for an IRRRL, although lender requirements can vary. 

Does a VA cash out refinance require an appraisal?

Yes. VA guidance identifies an appraisal as a requirement for cash out refinancing. 

How do I calculate refinance break even?

Use:

Net refinance costs ÷ monthly principal and interest savings = break even period

For example, $6,000 in costs divided by $250 in monthly savings equals 24 months.

What is the VA IRRRL funding fee?

The current VA funding fee listed for IRRRLs is 0.5 percent, subject to applicable exemptions. 

What is the VA cash out refinance funding fee?

The current listed VA cash out refinance funding fee is 2.15 percent for first use and 3.3 percent after first use, subject to applicable exemptions. 

Can I receive cash from an IRRRL?

No. VA guidance states that cash to the borrower is not permitted through an IRRRL. 

Can I take cash out with a VA refinance?

Yes, a VA backed cash out refinance may allow a borrower to receive cash from home equity, subject to the applicable VA and lender requirements. 

Does refinancing restart my mortgage term?

It can. If you refinance into a new 30 year loan, your repayment schedule may extend even if you have already been paying your existing mortgage for several years.

Should I refinance into a shorter loan term?

It depends on your financial objectives. A shorter term can reduce total interest but generally increases the monthly payment. VA specifically cautions that shortening the term can create a substantial payment increase. 

Does a lower payment always mean I am saving money?

No. A lower payment can result from a lower interest rate, a longer loan term, or both. Compare total costs and interest over the period you expect to keep the mortgage.

How long should I plan to keep the loan for a refinance to make sense?

There is no universal period. Calculate your individual break even point and compare it with your expected time in the property.

Should I compare several VA lenders?

Yes. The VA itself encourages Veterans to contact multiple lenders because rates, fees, and terms can vary. 

What is the biggest mistake when refinancing a VA loan?

Focusing only on the new interest rate or monthly payment without calculating closing costs, break even, loan term, total interest, and the Veteran's expected time in the property.