VA IRRRL
The VA streamline allows those who currently have a VA loan to refinance into a new VA loan with a lower rate and payment, and do it quickly and easily.
This loan type, also called the Interest Rate Reduction Refinancing Loan (IRRRL) eliminates many of the roadblocks that hold up applicants on other types of refinances. The VA Streamline is much easier because of these attributes:
Contact one of our licensed VA streamline experts to see how much you can start saving.
EligibilityIf you’re interested in a VA Streamline (IRRRL) you must currently have a VA loan. Your mortgage professional will pull a Prior Loan Validation from VA’s website to prove current VA loan status. There are some additional requirements.
On-Time PaymentsIn addition, you are required to have made on-time payments over the past year, with no more than one payment that was 30+ days late in the past 12 months. If you did have a late payment, say, 8 months ago, you may want to wait 4 months before applying.
Lower Payments or other BenefitThe VA streamline must put the borrower in a better financial situation, or the lender won’t approve the loan.
The new payments on the VA streamline must be lower than your current payments. There are a few exceptions, like when you:
To prove the benefit of the refinance, your lender will provide you with a form stating the interest rate and payment of your current loan compared to the rate and payment of the new loan. The form will also state how long it will take the refinance to pay for itself. For instance, if the refinance will cost you $3000 in closing costs, but you are saving $300 per month, you will make back the cost of the refinance in 10 months. Be sure to review this form to make sure you are receiving an adequate benefit from the refinance. Talk to one of our VA experts to determine your refinance payback time frame.
OccupancyYou must certify that you previously occupied the home that you are refinancing with a VA streamline. Those applying for a VA streamline are more likely to qualify if they currently live in the home.
There are still instances where you may still qualify if you don’t live in the home. For example, if you lived in the home, then relocated and rented it out, you still may be able to apply for a VA streamline. Speak with your lender for more information.
VA Streamline Funding FeeThe VA funding fee is required on most purchase and refinance VA loans to defray the costs of the VA home loan program. In most cases, the VA Streamline funding fee is 0.50% of the new loan amount. This fee can be financed into the loan so that the veteran does not have to pay it at closing of the loan.
The fee is waived for veterans who are disabled due to service-related injuries. The VA makes this determination and provides it to the lender.
The 0.50% fee is much less than the 2.15% or 3.3% usually required for purchase or VA cash out refinance loans. Speak to one of our VA experts at 888-516-9990 or complete an easy one-minute formto see if you qualify for a VA streamline.
Subsequent UseThe VA streamline is not viewed as a subsequent use of your VA home loan benefit. You will not incur the 3.3% subsequent use fee because you used the VA streamline refinance program.
EntitlementThis loan does not use any of your VA home loan entitlement, nor do you have to prove remaining entitlement to obtain a VA streamline. Your remaining VA entitlement after purchase of the home, if any remains, does not change when you obtain a VA streamline.
Loan Terms and VA StreamlinesAs discussed previously, your VA loan term may decrease, for instance, from 30 years to 15 years. In this case, it’s OK that your payment increases.
You can also refinance a 15 year loan into a longer term loan. However, keep in mind that the most your loan term can increase is 10 years. So if you currently have a 15 year term, the longest loan you can refinance into will be 25 years.
This loan type, also called the Interest Rate Reduction Refinancing Loan (IRRRL) eliminates many of the roadblocks that hold up applicants on other types of refinances. The VA Streamline is much easier because of these attributes:
- No paystubs or W2s required
- No bank statements required
- No home appraisal required
- Underwater homes are eligible
- Lower funding fee is than VA purchase loans
- Closing costs can be wrapped into the new loan, meaning little or no out-of-pocket expenses
Contact one of our licensed VA streamline experts to see how much you can start saving.
EligibilityIf you’re interested in a VA Streamline (IRRRL) you must currently have a VA loan. Your mortgage professional will pull a Prior Loan Validation from VA’s website to prove current VA loan status. There are some additional requirements.
On-Time PaymentsIn addition, you are required to have made on-time payments over the past year, with no more than one payment that was 30+ days late in the past 12 months. If you did have a late payment, say, 8 months ago, you may want to wait 4 months before applying.
Lower Payments or other BenefitThe VA streamline must put the borrower in a better financial situation, or the lender won’t approve the loan.
The new payments on the VA streamline must be lower than your current payments. There are a few exceptions, like when you:
- Refinance an adjustable rate mortgage (ARM) to a fixed rate mortgage.
- Refinance into a shorter term
- Finance energy efficient improvements into the VA streamline
To prove the benefit of the refinance, your lender will provide you with a form stating the interest rate and payment of your current loan compared to the rate and payment of the new loan. The form will also state how long it will take the refinance to pay for itself. For instance, if the refinance will cost you $3000 in closing costs, but you are saving $300 per month, you will make back the cost of the refinance in 10 months. Be sure to review this form to make sure you are receiving an adequate benefit from the refinance. Talk to one of our VA experts to determine your refinance payback time frame.
OccupancyYou must certify that you previously occupied the home that you are refinancing with a VA streamline. Those applying for a VA streamline are more likely to qualify if they currently live in the home.
There are still instances where you may still qualify if you don’t live in the home. For example, if you lived in the home, then relocated and rented it out, you still may be able to apply for a VA streamline. Speak with your lender for more information.
VA Streamline Funding FeeThe VA funding fee is required on most purchase and refinance VA loans to defray the costs of the VA home loan program. In most cases, the VA Streamline funding fee is 0.50% of the new loan amount. This fee can be financed into the loan so that the veteran does not have to pay it at closing of the loan.
The fee is waived for veterans who are disabled due to service-related injuries. The VA makes this determination and provides it to the lender.
The 0.50% fee is much less than the 2.15% or 3.3% usually required for purchase or VA cash out refinance loans. Speak to one of our VA experts at 888-516-9990 or complete an easy one-minute formto see if you qualify for a VA streamline.
Subsequent UseThe VA streamline is not viewed as a subsequent use of your VA home loan benefit. You will not incur the 3.3% subsequent use fee because you used the VA streamline refinance program.
EntitlementThis loan does not use any of your VA home loan entitlement, nor do you have to prove remaining entitlement to obtain a VA streamline. Your remaining VA entitlement after purchase of the home, if any remains, does not change when you obtain a VA streamline.
Loan Terms and VA StreamlinesAs discussed previously, your VA loan term may decrease, for instance, from 30 years to 15 years. In this case, it’s OK that your payment increases.
You can also refinance a 15 year loan into a longer term loan. However, keep in mind that the most your loan term can increase is 10 years. So if you currently have a 15 year term, the longest loan you can refinance into will be 25 years.
