While the FHA has its own FHA Streamline Refinance program, the VA home loan program has one as well. The VA Streamline IRRRL (Interest Rate Reduction Refinance Loan) is usually available only through VA-approved lenders and is one of the most popular refinance loans for Veterans and active-duty military servicemembers.
Basics of a VA Streamline Interest Rate Reduction Refinance Loan
The VA Streamline IRRRL was established and intended to help VA mortgage borrowers in reducing their interest rate. Not everyone would qualify for this program, but current homeowners under the VA mortgage loan program may be eligible if they are looking to switch over to a more stable and secure loan term, such as going from an Adjustable Rate Mortgage (ARM) to a Fixed-Rate Mortgage. Another common reason why a VA borrower may choose to streamline their current mortgage would be to lower their current payment.
Even though the VA streamline refinance is offered only by VA-approved lenders, the Department of Veterans Affair (VA) is the agency that guarantees the loan in the event that the borrower defaults. The streamline under VA was designed not only to help VA homeowners save after a refinance, but during as well.
Being one of the most cost-efficient programs around, here are the advantages of refinancing through the VA streamline refinance program, besides the reduced paperwork involved:
- There are usually no out-of-pocket expenses
- Offers themost competitive rates
- You are usually not required to use the same lender as your original loan
- You are not required to obtain a new Certificate of Eligibility (COE)
- A reduced interest rate and mortgage payment are often the post results
- Primary residence are usually eligible, as long as you certify that you were in fact the previous property owner
Keep in mind that there is no cash-out allowed with a VA streamline refinance.
Just like with any other mortgage loan program, you can expect for the VA streamline refinance program to have its own set of criteria and guidelines for qualification of the loan. However, many banks may have their own additional set of guideline requirements that borrowers must meet before an eligibility status can be determined. These guidelines may vary from lender to lender.
VA Streamline Refinance Important Facts
- The VA streamline refinance is fairly simple when compared with qualifying for a VA purchase home loan.
- The VA does not require an appraisal, credit information, or underwriting, but your VA approved lender may require these things.
- It is possible to roll your closing costs into your VA streamline refinance – meaning you will be required to bring zero money to closing.
- With the VA streamline, your new monthly payment must be lower than the previous loan’s monthly payment, unless you are refinancing an adjustable rate mortgage or the new loan term is less than the old one.
- Your new interest rate must be lower than the interest rate you had with your previous loan. /li>
- The VA streamline usually allows for a fixed rate or variable rate mortgage.
- With the VA streamline, you may be able to finance energy efficient improvements into your loan; up to $6000.
- No cash-out is allowed with the VA streamline refinance.
- You must be current on your existing VA mortgage and not have had more than one 30-day late mortgage payment within the past 12 months.
VA Streamline IRRRL Closing Costs
Another great benefit to mention is the closing costs for a VA streamline refinance, there are typically no out-of-pocket expenses required from the borrower. The closing costs is often times included into the new loan and can be paid through the new monthly mortgage payment.
VA Streamline Refinance: VA-Approved Lenders
The VA streamline refinance program is not handled by the VA, it is done through VA approved lenders. One of the most popular lenders for the VA streamline refinance program is VAMortgageCenter.com and they have helped thousands of Veterans with their VA streamline refinance.