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Saving $200 a Month, Plus $145,000 for Home Improvements


Ralph and Debra L. | Fairfax Station, Virginia | Cash-Out Refinance

Ralph retired from the Army as a lieutenant colonel in 1993, after 21 years of service, much of it spent as an intelligence officer stationed in the Middle East and Northern Africa.

All the while, he and his wife of 30 years, Debra, had retained their townhome in Springfield, Virginia, just outside of Washington, D.C. “We just love that area. It’s a beautiful community with large trees and nice homes,” says Longmire. “We knew it was where we ultimately wanted to live.”

In 2003, they secured a conventional loan and purchased a large home with a big lot in Fairfax Station — just about five minutes from their townhome. A few years later, interest rates started falling and they decided to refinance their home using their VA Home Loan benefit. They closed their refinance with an interest rate of 3.80%.

Considering a Second Refinance

In 2020, as interest rates dropped to near historic lows, Ralph and Debra realized it might make sense to refinance their loan again, this time taking some cash out using their home equity to make improvements and refinance other higher-interest debts.

“With the stock market being so volatile, we thought it made more sense to take money out of the house rather than from our IRAs,” Longmire says.

There are two options when you refinance a VA Home Loan: A streamlined VA Interest Rate Reduction Refinance Loan (IRRRL) or a VA Cash-Out Refinance.

The VA IRRRL is truly a streamlined process. If you simply want to pay off your existing VA Home Loan with a new mortgage at a lower rate, the IRRRL does not require an appraisal of your house and there is less documentation required.

The VA Cash-Out Refinance enables you to tap into the equity in your home and take money out for home improvements or other major expenses. It requires you to provide evidence of income and employment for all borrowers who will appear on the loan application. You’ll also have to provide W2 forms from the previous two years. Plus, many VA lenders will ask for copies of your federal income tax returns from the last two years.

The benefits of refinancing a VA Home Loan may include:

  • Shorter loan term
  • Lower interest rate
  • Lower monthly mortgage payment
  • Increase in the borrower’s monthly residual income
  • Get funding up to 90% of the appraised value of the home with a VA Cash Out Refinance
  • Moving from an adjustable-rate to a fixed-rate

Getting Help

Instead of going online to get refinance quotes where you hit the send button and get a million calls, Ralph and Debra turned to a company they already knew and trusted.

“I’ve been a Member of AAFMAA for 30 years, ever since I was headed to Desert Storm and wanted resources here for my wife in case something happened to me,” says Longmire. “As a 30-year AAFMAA family, we knew we could trust the organization completely.”

They got in touch with Military Mortgage Advisor Bob Kerlin, who works in the AAFMAA Mortgage Service LLC (AMS) office in Fayetteville, North Carolina. “I was very pleased they came to us,” says Kerlin. “I felt with their interest rate and equity in the home we could really help them.”

They waited briefly as rates rose and fell slightly and then locked in their final rate with guidance from Kerlin. “We were able to get them a great rate and the cash they wanted,” says Kerlin.

Saving Every Month

The Longmires closed on their VA Cash-Out Refinance in April 2020. Due to the coronavirus pandemic, the closing was very unique with everyone following CDC guidelines by practicing good social distancing and wearing protective masks. With an interest rate of 3.125%, the refinance is saving the Longmires about $200 a month. Plus, they took out roughly $145,000 for home improvements and to refinance other debts.

Since then, they’ve remodeled a couple of bathrooms and redone portions of their deck. They also paid off some credit card debt. “And that’s just a start. We have a lot more planned for this house and living out our retirement,” says Longmire.

“Working with AAFMAA was definitely the way to go,” he adds. “We dealt with one person from start to finish… Bob Kerlin and the AAFMAA team made it all happen with no hiccups at all.”

Use our calculators to help determine if refinancing is the best option for you.

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We’re Here to Help

Established in 1879, the American Armed Forces Mutual Aid Association (AAFMAA) is the longest-standing, non-profit financial solutions provider supporting military families and veterans with advice, information, insurance, financial planning, investments, mortgages, survivor assistance, and other benefits.

If you’re interested in purchasing a home, or refinancing your current mortgage, give Military Mortgage Advisor, Bob Kerlin a call at (919) 747-3386 or contact us for current rates and additional details.

Please note: The borrower story above is an actual customer's experience working with AAFMAA Mortgage Services LLC (AMS). Your actual loan experience may differ, and all loans are subject to credit approval and interest rates, terms, and fees will vary based on your credit, state, and type of loan. Please check with us for details.