VA STREAMLINE LOANS

 

The VA offers a Interest Rate Reduction Refinancing Loan or ("IRRRL") as a way for current VA homeowner to lower their interest rates with little or no out-of-pocket costs. It's also called a "Streamline Refinance" or a "VA to VA Loan."

 

A VA Streamline Refinance (IRRRL) allows you to refinance your current mortgage at a lower interest rate than you are currently paying.  In fact, except when refinancing an existing VA guaranteed adjustable rate mortgage ("ARM") to a fixed rate, the Streamline Refinance or IRRRL must result in a lower interest rate (when refinancing from an existing VA ARM loan to a fixed rate VA loan, the interest rate can increase).

 

The IRRRL is available to all qualiifed veterans who want to refinance their original VA Loan, an utilize their original eligibility.

 

The "No Cost" Streamline Refinancing, even lets you refinance your VA loan an incur no out-of-pocket expenses. We offer lender credits that pay your costs, in exchange for a slightly higher interest rate.  Or you can roll the closing costs into your new Streamline Refinance Loan.

 

The Streamline Refinance Loan may be done with "no money out of pocket" by including all costs in the new loan or by making the new loan at an interest rate high enough to enable us to pay the costs (as long as the interest rate on the new loan is lower than the rate on the old loan…unless you are refinancing an ARM to a fixed rate mortgage).

 

A VA Streamline Refinance can be accomplished faster and with less documentation than a typical refinance loan.  There is no appraisal or credit underwriting required by the VA (however, we may require an appraisal and credit report on a case-by-case basis).  Also, a certificate of eligibility is not required.  We may use an e-mail confirmation procedure for your IRRRL in lieu of a certificate of eligibility.

 

Remember,  your IRRRL can be done only if you have already used your eligibility for a VA loan on the property you intend to refinance. It must be a VA to VA refinance, and it will reuse the VA Home Loan entitlement you used originally. You may have used your entitlement by obtaining a VA loan when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the loan.  If you have your Certificate of Eligibility, make sure you include it with your documentation.

 

It is important to note, that the occupancy requirement for an IRRRL is different from other VA loans.  When you originally obtained your VA loan, you certified that you occupied or intended to occupy the home.  For an IRRRL, you need only certify that you previously occupied it.

 

The loan may not exceed the sum of the outstanding balance on the existing VA loan, plus allowable fees and closing costs, including funding fee and up to 2 discount points.

 

You may also add up to $6,000 of energy efficiency improvements into the loan. Sometimes, adding all of these items into your loan can result in your owing more than the fair market value of your house; that will reduce the benefit of refinancing since your payment will not be lowered as much as it could be. In that case, please keep in mind that you could have difficulty selling the house for enough to pay off your loan balance.

 

IRRRL's can provide an opportunity to reduce the term of your loan from 30 years to 15 years.  While this can save you money in interest over the life of the loan, if the reduction in the interest rate is not at least one percent (two percent is better), you may see a very large increase in your monthly payment... and that increase could be more than you can afford.

 

No loan other than the existing VA loan may be paid from the proceeds of an IRRRL. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage.

 

A QUICK OVERVIEW

• No loan assumptions are allowed.

• You cannot receive any cash back.

• The VA does not require an appraisal, any income or employment verifications, no credit report and no termite report, yet the mortgage must have been paid as agreed for the last twelve (12) months and must be up to date at the time of refinancing.

• Any other liens must be subordinated to the VA loan.

 

Talk to us about the best refinancing options available through our VA Loan program. Whatever you need, we are here to serve you.