Considering a Refinance from VA Loan to Conventional
7 minute read
August 23, 2023


There’s no waiting period when refinancing from a VA loan to conventional.

Refinancing a VA loan into another VA loan (i.e. VA streamline refinance or VA cash out) you must wait 210 days after the first payment was made.

If you have reason to refinance into a conventional loan immediately after closing a VA loan, it may be possible. But following are additional requirements for a conventional loan that you may not meet if you just got a VA loan.

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Eligibility for refinancing

Refinancing your VA loan requires meeting specific eligibility criteria.

Credit score and financial health

Conventional loans generally demand a higher credit score compared to VA loans, as they involve greater risk for private lenders. You typically need a 620 score for a conventional loan, but may not receive a reasonable interes rate unless your score is 700 or higher.

Debt-to-income ratio

Lenders also assess your debt-to-income (DTI) ratio, which compares your monthly debt obligations to your income—indicating your ability to comfortably manage your financial responsibilities.

Whereas you might get a VA loan with a DTI as high as 50%, most conventional loans tap out at 45%.

Equity and loan-to-value ratio

You typically need at least 3-5% equity in your home to refinance into conventional. You need even more if you plan to wrap closing costs into the refinance.

Income verification and employment history

Whereas a VA IRRRL requires no employment or income history, you’ll need to document two years of solid employment or equivalent school to qualify for conventional.


PMI is required for conventional loans with less than 20% down, or less than 20% equity in the home at time of the refinance. VA loans require no mortgage insurance, so your cost may rise by refinancing into conventional.

Check your conventional refinance eligibility.

Factors to consider for VA to conventional refinancing

Before refinancing your VA loan to a conventional loan, it’s crucial to weigh several key factors that can significantly impact your financial situation.

Current interest rates

VA-backed loans often come with competitive interest rates—the support of the Department of Veterans Affairs goes a long way to calm the nerves of lenders.

Make sure to compare those rates to the ones offered for conventional loans, taking into account potential fluctuations over time.

Closing costs and fees

Refinancing requires closing costs, including fees for appraisals, title searches, and other administrative expenses. While VA loans typically have limitations on closing costs, conventional loan closing costs might vary widely. Factor in these costs when assessing the overall financial benefit of refinancing.

What’s the break-even point? Determine how long it will take to recoup the costs through the reduced monthly payments.

Loan terms and repayment plans

Looking to pay off your mortgage sooner or reduce monthly payments? Refinancing to a conventional loan with a different term might work.

Additionally, conventional loans offer a wider array of repayment plans, giving you more flexibility to tailor your mortgage to your financial circumstances.

Impact on credit score and financial stability

Applying for a new loan triggers a hard inquiry on your credit report, which might cause a temporary dip in your score—but consistent and timely mortgage payments can positively impact your credit over time.

Does refinancing provide you with more financial breathing room?

Conventional refinance vs. IRRRL (interest rate reduction refinance loan)

Comparing a conventional refinance to an IRRRL is vital, especially if you’re eligible for both options.

An IRRRL is designed to streamline the process of refinancing a VA loan and typically requires less documentation, no appraisal, and limited credit checks.

However, a conventional refinance might offer distinct advantages even though it’s often more rigorous to qualify for.

For instance, if you’re seeking to access your home’s equity, transition to a different loan term, or secure a lower interest rate, a conventional refinance could be more suitable.

When is refinancing a VA Loan to conventional a good idea?

Refinancing from a VA loan to a conventional one can be a favorable move in several scenarios.

Planning to keep your home as a rental property

If you plan to convert your current residence into a rental property and want to use a VA loan benefit again for a new primary residence, refinancing to a conventional loan becomes a strategic step.

Generally, having two VA loans simultaneously is not allowed unless you have sufficient remaining entitlement to qualify for a second loan. Refinancing your current VA loan into a conventional loan might be necessary to regain eligibility for another VA loan.

Interest rate and term optimization

As mentioned above, if you’re in a position to drop your interest rate or adjust the loan term, a conventional loan might offer better options and lead to considerable savings over time.

20%+ equity and avoiding VA funding fee

When your equity exceeds 20%, transitioning to a conventional loan eliminates the need to pay the VA funding fee, resulting in cost savings.

Changing financial needs

Your financial circumstances might evolve over time. If you’ve experienced a positive change in your financial stability, a conventional loan might provide more flexibility in terms of repayment plans and loan terms.

Market trends and your long-term plan

Depending on the real estate market and your future plans, a conventional loan might be better aligned with your objectives. Consider consulting with a professional, knowledgeable financial advisor to assess the long-term impact of your decision.

Start your conventional refinance.

Refinance a VA loan to conventional—FAQs

Is there a waiting period for refinancing a VA loan to conventional one?

No, there is no waiting period when refinancing a VA loan to conventional. Refinancing a VA loan to another VA loan requires a 210-day waiting period starting when the first payment is made.

What are the typical closing costs associated with refinancing?

You can expect to pay 2-4% of the loan amount in closing costs.

Will refinancing affect my credit score?

Yes, refinancing can impact your credit score. An application process like this will trigger a hard inquiry on your credit report, which might cause a temporary dip in your score. However, responsible management of your new loan, including on-time payments, can positively influence your credit over time.

Can I refinance to a conventional loan even if I have a low credit score?

Conventional loans typically have stricter credit score requirements compared to VA loans. While it might be more challenging to refinance with a low credit score, it’s not impossible. Consult with lenders to explore your options and potential eligibility.

Should I refinance into conventional even if I need PMI?

Generally, if you need private mortgage insurance (PMI) and don’t have enough equity to avoid it, transitioning to a conventional loan might not benefit you. VA loans don’t require PMI, making them more favorable in such scenarios.

Is the VA funding fee refundable if I refinance?

The VA funding fee is not refundable upon refinancing. Regardless of how long you’ve had your VA loan, the funding fee remains non-refundable.

Can I have two VA loans at once?

Generally, having two VA loans simultaneously is not allowed unless you have sufficient remaining entitlement to qualify for a second loan. Refinancing your current VA loan into a conventional loan might be necessary to regain eligibility for another VA loan.

Can I refinance a VA loan to FHA?

Yes, it’s possible to refinance a VA loan to an FHA loan but you’ll take on mortgage insurance, most likely increasing your monthly payment.

How long does the refinancing process usually take?

On average, the process can take anywhere from 30 to 60 days.

Overview: How soon can I refinance a VA loan to conventional one?

Remember that each individual’s financial situation is unique. To gain personalized advice and guidance tailored to your specific needs, we strongly encourage you to consult with a mortgage professional.

Get started refinancing your VA loan today.

Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.

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