The VA IRRRL is a refinance mortgage loan offered to homeowners with existing VA mortgages. This program, which is popularly known as the VA Streamline Refinance, simplifies home refinancing by waiving the documentation typically required by a bank, including income and employment verification, bank account and credit score verification, and an appraisal of the property.
What Is A VA Streamline Refinance/VA Loan?
VA loans are loans which participate in a particular loan program designed for veterans. VA loans can be issued by any VA-approved lender and so are fully guaranteed by the federal government.
The VA loan definitive characteristic is that veterans with qualifying credit and income can purchase a home with no money down, helping to make purchasing a home excessively attractive for people who have served in the military.
In addition, VA loans feature flexible requirements, without private mortgage insurance (PMI), and intensely competitive mortgage rates.
In order to be eligible for a VA Loan, a veteran should have served 181 days during peacetime, 90 days during wartime, or 6 years in the Reserves or National Guard. You may even qualify as the spouse of a service member who had been killed in the line of duty.
The VA Streamline Refinance is a particular loan program available via the VA Loan Guaranty program.
Officially known as an Interest Rate Reduction Refinance Loan (IRRRL) by the government, the VA Streamline Refinance may also be called a VA-to-VA Loan.
In most cases, just about all active duty and/or honorably discharged service members meet the criteria for a VA purchase or streamline refinance loan.
The VA Streamline Refinance (VA IRRRL) Loan
The VA Streamline Refinance can be referred to as the Interest Rate Reduction Refinance Loan (IRRRL). The IRRRL allows you to refinance your present mortgage interest rate to a lowered rate than you are currently paying.
The Streamline loan is exceptionally popular due to its simplicity of use: once you’ve already been approved for your initial VA purchase loan, it is relatively simple to lessen your interest rate and experience considerable savings.
Generally, a loan officer or lender with expertise in VA loans will be able to complete the loan within a month’s time in most cases.
VA loan closing costs can be rolled into the cost of the loan, allowing veterans to refinance without out-of-pocket expenses. Frequently it’s also possible for the lender to take the brunt of the fee in exchange for a higher interest rate on your own loan.
To be eligible to qualify for a VA Streamline, you have to meet with the following requirements:
- Be current on your mortgage with no more than one 30-day late payment within the past year.
- Your new monthly payment for the IRRRL must also be lower than the previous loan monthly payment. (The only time this condition does not apply is if you refinance an ARM to a fixed rate mortgage.)
- You must not receive any cash from the IRRRL.
- You must certify that you previously occupied the property.
- You must have previously used your VA Loan eligibility on the property you intend to refinance. (You may see this referred to as a VA to VA refinance.)
The VA Cash-Out Refinance Loan
A secondary VA refinance loan type is the VA Cash-Out refinance loan. The Cash-Out refinance allows borrowers to refinance their conventional or VA loan into a lower rate while also taking cash from the home’s value.
Functionally, the VA Cash-Out refinance loan replaces your existing mortgage rather than functioning as a home equity loan, which can be very confusing for many. A qualified borrower can refinance up to 100 percent of their home’s value in some cases.
The Cash-Out refinance loan is a loan type obtainable in any form – whether USDA, FHA, or conventional. Veterans generally go for the VA Cash-Out over other loan types because the period to settle the loan is extended, and in addition, generally comes with a lower interest rate.
Similar to the VA Streamline Refinance loan, your home can be used as a principal dwelling by the owner. There is absolutely no set period of time that you must have owned your property, nevertheless , you’ll want adequate equity to qualify for the loan.
VA Streamline Refinance Faqs
Do I want my Certificate of Eligibility (COE) for a Streamline Refinance?
As you used your Certificate of Eligibility to get your first VA loan, there isn’t a need to be eligible for a streamline refinance of your existing VA mortgage.
Does the VA control mortgage interest rates for VA loan types?
No, they don’t. Even though the VA provides an easy, straightforward process for veterans, VA mortgage rates are set by the banks who buy and sell mortgages.
Do I need to use my current lender to refinance my VA loan?
No, you don’t. In fact, it is encouraged that you check around between various lenders, as each will offer you various interest rates for your VA loan. All that really matters is that the lender is VA-approved. Because so many lenders out there finance VA loans, it makes sense to shop around.
Do I need to go through the credit check and appraisal process again when refinancing?
There’s absolutely no requirement from the VA for another credit check or appraisal process, because you have been approved for a loan. Nevertheless, many lenders require a credit check and appraisal to ensure that you’re still financially stable enough to cover your mortgage and also, that the house’s market value continues to be higher than their maximum loan amount.
Do I need to be eligible for a better interest rate to acquire a Streamline Refinance?
Not if you meet certain conditions. If you’re going from a fixed mortgage to some other fixed mortgage, the VA requires that your IRRRL be of a lowered interest rate, but if you’re moving from an adjustable rate mortgage (ARM) to a fixed rate mortgage, the VA will assist you to refinance to a higher interest rate.
Could I receive cash-in-hand within my VA Streamline Refinance closing?
Yes, you may receive up to $6,000 cash-in-hand at your IRRRL closing. The cash, though, can be used for energy-efficiency improvements, and must certainly be a reimbursement for improvements made within 90 days ahead of closing. Some VA borrowers will be given a cash disbursement of “old” escrow funds, too.
What’s the highest allowable VA IRRRL loan size?
There’s absolutely no maximum loan size limit for a VA loan. However, a VA Streamline Refinance will be limited by the present loan balance plus any accrued late fees and late charges, plus typical loan costs and the expense of any energy efficiency improvements.
Could I change the borrower-of-record with a VA Streamline Refinance?
Generally speaking, the borrower(s) obligated on the initial VA loan should be the identical to borrower(s) obligated on the refinance. However, this is simply not always possible. For instance, assume that the veteran and spouse are obligated on a preexisting VA loan.
An IRRRL is achievable in most of the following scenarios: Divorced veteran alone; Veteran and various spouse; and, spouse alone since the veteran died. An IRRRL isn’t feasible for a divorced spouse alone, or a different spouse alone because the veteran died.
Can I utilize the VA Streamline Refinance for an investment property?
Yes, you need to use the VA Streamline Refinance for an investment property. You must only certify that you previously occupied the property as your property. The property doesn’t have to be your primary residence.
Can I make use of the VA IRRRL if my loan is behind or delinquent?
Yes, you can VA Streamline Refinance a loan which will be behind in payments or delinquent. Your lender would want to understand that the reason for the delinquency has been resolved; and you must be willing and in a position to make the payments on the brand new VA loan.
Lastly, you’ll be asked to provide a letter to explain the delinquency alongside additional supporting documentation. The Department of Veterans Affairs can make a final determination perhaps the IRRRL should be approved.
Do VA loans qualify for the HARP 2.0 program?
No, the HARP 2.0 mortgage is split up from a VA loan, and HARP 2 loans must be currently backed by Fannie Mae or Freddie Mac.
Can I use VA loans for a no money down mortgage?
Yes. The VA loan allows for 100% financing without any down payment.
Check VA Mortgage Rates
The VA Streamline Refinance is among the simplest and fastest mortgage products designed for consumers today. Mortgage rates are low, so it’s an enjoyable experience to make the most of your veteran benefits.
Get today’s live VA mortgage rates now. Your social security number isn’t needed to get going, and all quotes have access to your live mortgage credit scores