VA Refinance Loan also know as streamline refinance or IRRRL, is designed to help veterans lower their current VA mortgage interest rate.
This Federally insured loan program was created by the Veterans Administration in order to help veterans and active duty members, who currently have VA mortgage, take advantage of lower mortgage interest rates.
This VA loan guaranty program, which is also referred to as IRRRL (Interest Rate Reduction Refinancing Loan Program), is straightforward and simple for US Veterans and active duty members to qualify for. Keep in mind, that you can use the terms IRRRL and VA Streamline Refinance Loan interchangeably.
Here are the Highlights of the VA Streamline Refinance Loan program:
- Appraisal of your home is NOT required.
- Any closing costs are rolled into the new loan - You can't receive any cash out.
- No bank statements, job verification, pay stubs are needed as conventional underwriting process does NOT apply.
- There is a minimum FICO (credit) Score of 620 or better required. In the last 12 months you cannot have more than ONE 30 day late payment on your current VA mortgage.
- Energy efficiency improvements to your home can be rolled into the loan amount.
Why the Program Was Developed?
This program gives Veterans and active duty service men and women a fast simple process to refinance their current mortgage loan.
Plus it is an inexpensive way to lower their mortgage bill.
Benefits of the IRRRL - VA Streamline Refinance Loan.
- The IRRRL doesn't require any income, credit or asset verification.
- Almost all Vets qualify.
- Out of pocket expense is ZERO - closing costs are rolled into the new loan.
- Property is not appraised.
- No need to verify income.
- Reduce your monthly payment by reducing your interest rate.
- Avoids potential foreclosure.
- Easily transition from an ARM to Fixed rate mortgage.
- No out of pocket closing costs - You are allowed to add up to $6000 over the amount you owe on your loan to cover closing expenses. This will be rolled into your new loan amount.
Refinancing from an adjustable rate loan.
Refinance could lower foreclosure risk - If you have an (ARM) adjustable rate mortgage, your housing bill may very well INCREASE when the fixed period expires. Depending on your exact mortgage terms, which is usually anywhere from 3-5 years.
It's not uncommon for your interest rate to jump dramatically - 2 to 5 percentage points after your ARM expires forcing you into conventional "refinance". The results can be devastating financially as you may not be able to afford to keep your home.
If you NEED to get out of an ARM and into a fixed rate mortgage! IRRRL can help you accomplish this.
If you’re not sure you have an adjustable rate mortgage, check with your mortgage company ASAP, you need to know when the adjustable period expires so you can take action and get into a fixed rate mortgage using the IRRRL program.
It's quite common that you may NOT realize you have an ARM! It could have been the way the loan was explained to you and didn't realize the interest rate could adjust after 1 to 3 years. If that's the case and you are Vet, it's time to take action NOW!
Take advantage of lower interest rates - What if today's interest rates are lower than the interest rate you are currently paying? If you simply want to reduce your monthly payment, an IRRRL may drastically reduce the overall dollar amount spent on interest by lowering your interest rate.
Links for additional information on VA Refinance:
Equal Housing Lender 