The Veterans Administration (VA) has issued its first WARNO, “Warning Order,” to servicemembers and veterans with VA home loans. Anyone with a VA home loan has probably come into contact with unsolicited offers to refinance their mortgage in a way that appears official and may sound too good to be true.
Many of these solicitations promise:
Don’t be fooled. Before responding to any unsolicited offers, here is what you need to know.
Some lenders marketing VA mortgage refinances may use aggressive and potentially misleading advertising and sales tactics. Lenders may advertise a rate just to get consumers to respond, or they may receive a VA mortgage refinance offer that provides limited benefit to while adding thousands of dollars to the loan balance.
How will you know if the offer is too good to be true?
Here are some offers and tactics to watch out for:
Certain lenders nevertheless use this as a selling point when they are unable to offer cash-out or a significantly lower interest rate.
There are also cases where servicemembers have experienced problems with their new escrow accounts after closing and have had to make higher monthly payments to make up for the shortfall.
These are all red flags that may indicate that the loan is less likely to be a benefit.
Before proceeding with a VA mortgage refinance, be sure to consider the long-term and short-term benefits, as well as the consequences of refinancing a loan.
Any veteran considering mortgage or refinancing through a VA loan, VA loan specialists are available from 8 a.m. to 6 p.m. ET, Monday through Friday, to assist.
For more information about a current VA loan, contact the VA at 877-827-3702.
Any veteran having a problem with a VA mortgage refinance or other mortgage issues can submit a complaint to the CFPB online or by calling 855-411-CFPB (2372).
If you currently have a VA loan and are having issues repaying your mortgage, you should call a VA loan technician at 877-827-3702 to explore potential options that can assist you.