The Quick Read: The closing runs in a fixed order. The lender clears the file, you review the Closing Disclosure, you sign with the closing attorney, a three-business-day right-to-cancel window runs, and then funds are disbursed: the old loan is paid first and any remaining cash goes to you. In an attorney-closing state, a licensed attorney handles title work and the signing table, and that changes which charges show up on your settlement statement.
Lendmire arranges these loans through wholesale lenders, so the mechanics below come from files, not theory. The loan itself is the VA cash-out refinance program. This article covers only the closing stretch: what happens after underwriting is done and before the cash lands.
Where Closing Fits in the File
Closing is the last stage of a full-underwriting loan. A cash-out is not a streamline. Before you reach the attorney’s office, the file has already cleared these steps:
1. Eligibility. The Certificate of Eligibility is confirmed, and you plan to live in the home you are refinancing.
2. Application. You receive a Loan Estimate and sign the intent to proceed.
3. Appraisal. The appraised value sets the ceiling. A VA cash-out can reach 100% of appraised value, including a financed funding fee.
4. Underwriting. Credit, income, and residual income are reviewed, the net tangible benefit is tested, and seasoning is checked if the loan being paid off is a VA loan.
5. Clear to close. Conditions are met and the closing package goes out.
Everything below picks up at step five. Program figures are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
What Makes an Attorney-Closing State Different?
In an attorney-closing state, a licensed attorney conducts the closing, examines title, and handles the money flow. In an escrow or title-company state, a neutral escrow officer does most of that. The loan is the same. The people at the table and the line items on the statement are not.
| Factor | Attorney-closing state | Escrow/title-company state |
|---|---|---|
| Who conducts closing | Closing attorney | Escrow or title officer |
| Title review | Attorney examines title | Title company examines |
| Who holds funds | Attorney trust account | Escrow account |
| Typical extra line | Title exam fee | Escrow fee |
Practice varies by state, and some states have their own rules on where a closing happens or who may conduct it. Ask your loan officer which applies to your property. State law can also add limits beyond VA’s.
Closing Steps in Order
1. Clear to close and the attorney
Once underwriting signs off, the lender sends the closing instructions to the closing attorney. In many files the lender or broker assigns or approves the attorney. Ask early who is picking the attorney. Then call the office, confirm they have the package, and ask what ID and funds they expect.
2. The Closing Disclosure review window
The lender must put the Closing Disclosure in your hands at least three business days before you sign, as the CFPB explains. Use that window. Compare it line by line to your Loan Estimate. Check the loan amount, the funding fee, the payoff, and every fee name.
3. The payoff statement
The old lender issues a payoff figure good through a stated date. Interest keeps accruing daily on the old loan. If the signing date slips, the payoff figure changes, and the closing attorney updates it. Keep making your regular payment on the old mortgage until the payoff is confirmed.
4. Pre-closing prep
- Bring a government photo ID.
- Verify any wire instructions by phone with a number you already trust, never from an email alone.
- Bring a certified or wired amount only if the final statement shows you owe funds.
- Confirm the name on the deed matches your ID and the loan documents. Mismatches stall closings.
5. The signing
You sit with the attorney or a notary working for the attorney. The package includes the promissory note, the mortgage or security instrument, the initial escrow statement, and the right-to-cancel notice. The CFPB’s closing overview lists the documents to review. The attorney should explain each one. Ask questions here, not later. Whether remote or mobile signing is allowed depends on state rules and the lender, so ask.
6. The right-to-cancel window
A refinance on the home you live in carries a three-business-day right to cancel. For this count, Saturdays are business days. Sundays and legal public holidays are not. The clock starts after the last of three events: you sign, you receive the Truth-in-Lending disclosure, and you receive two copies of the rescission notice. The CFPB’s rescission guidance spells out the counting.
Here is the practical effect. Sign on a Thursday, and the days run Friday, Saturday, and Monday. A Friday signing runs Saturday, Monday, and Tuesday. A holiday pushes it one more day. Notice must be mailed or delivered before midnight of the third day.
7. Funding and disbursement
In a refinance, cash is generally not disbursed until the window has passed. That is standard industry practice, so plan around it if the money is earmarked for a debt payoff or a repair contractor. When funds move, the order is the same on nearly every file: the lender’s funds go to the attorney’s account, the old loan is paid off, any other required liens or debts are paid, closing costs are settled, and what is left goes to you.
8. Recording and post-closing
After disbursement, the attorney records the new security instrument. The old lender releases its lien, and a title policy follows. Your first payment and escrow transition come from the new servicer. Confirm in writing that the old loan shows paid in full. If a bill for the old loan still arrives, call the attorney’s office before paying it.
Reading the Settlement Statement
Think of the statement as three buckets. Money in: the new loan amount, which includes a financed funding fee. Money out to others: the old payoff, other liens or debts paid at closing, third-party costs, prepaid items. Money out to you: whatever is left.
The funding fee on a cash-out refinance is 2.15% for first use and 3.3% for subsequent use, and it is waived for veterans receiving compensation for a service-connected disability and other exempt groups. The reduced down-payment fee tiers do not apply to refinances. Because the fee is financed, it must fit under the 100% ceiling.
Net cash is a subtraction, not a promise. A higher payoff, a financed fee, or a lower appraisal shrinks it. Run that subtraction before you commit the cash to anything.
Documents you sign
| Document | What it does | What to check |
|---|---|---|
| Promissory note | Your promise to repay | Loan amount, term |
| Security instrument | Pledges the home as collateral | Names, property address |
| Right-to-cancel notice | Starts the three-business-day window | Two copies, dates |
| Initial escrow statement | Shows tax and insurance setup | Items and amounts |
The Attorney Fee Question
This is where attorney-closing states trip people up. VA’s fee rules split attorney work in two. Title examination, even when an attorney performs it, may be itemized and charged to the veteran if the fee reflects actual cost and is reasonable and customary. Attorney fees tied to the settlement itself may not be charged to the veteran, per VA Circular 26-10-01. That circular is dated, so use it for the principle only.
VA’s Lenders Handbook chapter on allowable fees says the borrower may pay for title examination and title insurance. It lists attorney services other than title work among the items the lender covers from its flat charge.
On your statement, a “title examination” line is normal. A separate “attorney settlement” or “closing attorney” line charged to you deserves a question. Ask the lender to show which side is paying it. Do this during the Closing Disclosure review window, not at the table.
What Can Go Wrong at Closing
- Title defects. An old lien, a recording error, or a missing heir can surface during the attorney’s exam. The attorney works to clear title before funding. This is why title work starts early.
- Payoff mismatch. The old lender’s figure moves with the date. Re-confirm it if the signing slips.
- Unreleased liens. A prior second mortgage or judgment that never got released will show up. It must be paid or released.
- Name mismatch. The deed, ID, and loan documents must agree.
- Appraisal short of expectations. The 100% ceiling is measured against appraised reasonable value, so a low value cuts net cash.
- Seasoning on a VA-to-VA cash-out. The loan being paid off must be seasoned at closing, or the new loan is not eligible for VA guaranty. The test is the later of 210 days from the first payment due date or the sixth payment. Seasoning applies only when you are refinancing a VA loan. Refinancing a non-VA loan into VA is allowed without it.
If a defect appears at the table, the usual path is to pause, let the attorney and lender cure it, and reissue figures. A corrected Closing Disclosure can restart review time in some cases, so ask.
Rules That Sit Behind the Steps
VA’s Circular 26-19-05 defines two types of cash-out. Type I is a VA-to-VA loan where the new balance, fee included, does not exceed the payoff. Type II exceeds the payoff and puts cash in your hands. It also confirms the 100% limit on loan to value, with the funding fee counted in, and requires a net tangible benefit test on all cash-outs. The rule traces to VA’s interim final rule under the 2018 regulatory relief law.
The net tangible benefit test is a defined list, not a general “lower is better” standard. The lender must hand you the test and it must be satisfied. Lenders may also set stricter limits than VA does, such as a lower leverage cap or a higher credit floor. Those are overlays. Across the wholesale programs Lendmire places files with, the VA cash-out reaches 100% of appraised value with no mortgage insurance, starting at a 580 decision score, with residual income as the controlling test.
Key Terms Defined
Closing Disclosure: The final statement of loan terms and costs, delivered at least three business days before signing.
Right of rescission: Your three-business-day right to cancel a refinance on the home you live in.
Payoff statement: The old lender’s figure to retire the existing loan, valid through a stated date.
Net tangible benefit: A VA test showing the new loan serves your financial interest.
Seasoning: The minimum payment history required on a VA loan before it can be refinanced.
Per diem: The daily interest added to a payoff when closing moves later.
A Decision Check Before You Sign
A larger balance means more interest over the life of the loan, as VA News notes. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit. Before signing, ask three things. Is the cash going to a purpose worth the added balance? Does the funding fee, financed, still fit under the ceiling with room? Could a different structure, like a refinance without cash out, meet the goal? Occupancy still matters: eligibility rests on living in the home, and an active-duty member’s spouse or dependent may occupy it.
Frequently Asked Questions
Can I cancel after I sign a VA cash-out refinance?
Yes, within the three-business-day right-to-cancel window. Saturdays count and Sundays and legal holidays do not. You must mail or deliver written notice before midnight of the third business day. If the lender failed to give the proper notices, the right can extend, but it lapses at the earliest of three years or a transfer of your interest in the property.
When do I get my cash?
After the right-to-cancel window ends. In a refinance, cash is generally not disbursed during that window, which is standard practice. The old loan is paid off first, then other required payoffs and costs, and the remainder goes to you.
Do I have to use the lender’s attorney?
It depends on the state and the lender. In many files the lender or broker designates the closing attorney. Ask who selects the attorney, who pays for which line, and whether you may propose your own.
Can I be charged an attorney fee on a VA loan?
Only for title examination, if reasonable and customary. VA bars charging the veteran for attorney fees tied to the settlement itself. Question any separate attorney settlement charge on your statement.
Do I need to bring money to closing?
Only if the final Closing Disclosure shows you owe funds. On a cash-out, the statement usually shows cash to you. Verify any wire instructions by phone first.
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the program’s current guidelines, see VA loan programs.
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References
1. CFPB: What is a Closing Disclosure
3. CFPB: How long do I have to rescind
5. Lenders Handbook chapter on allowable fees
7. Federal Register interim final rule (AQ42)
8. VA News
This article is part of Lendmire’s VA Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: How to Close a Texas Homestead VA Cash-Out Refinance · VA Cash-Out Refinance Availability by State and What Changes · VA Cash-Out Refinance Requirements for a Condo Project
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.