VA Refinance (IRRRL)
A VA streamline refinance is also called IRRRL, or Interest Rate Reduction Refinancing Loan, or, a “VA to VA” loan. The basic requirement is that the IRRRL MUST lower your payments when all is said and done. However, there’s an exception. When a VA adjustable mortgage is refinanced to a fixed rate, it is possible that the new rate or payment could be higher.
While the VA has no requirement for an appraisal or credit underwriting for an IRRRL, in the newer, more conservative lending environment, financial institutions are requiring both a new appraisal as well as credit report. The VA is currently evaluating programs to help VA homeowners who are seriously underwater. As we learn more about them, we will post the information here.
A certificate of eligibility isn’t required for an IRRRL streamline refinance. The financial institution is permitted to use the VA’s email confirmation procedure for the purpose of an interest rate reduction refinance rather than a certificate of eligibility.
An IRRRL CAN (but may not necessarily) be done with no money out of pocket or expenses rolled into the loan. Subject to the appraisal, loan to value and loan size limits, expenses may be integrated in the new loan, and the loan could be done at a high enough interest rate that will enable the financial institution to pay the expenses, provided that the rate of interest is still lower than the previous mortgage if it isn’t an ARM. The other option is to look at various rate/fee combinations with your lender to find what is right for you.
You can choose any lender you like to do your VA streamline refinance. It isn’t required that you simply use the same financial institution you currently have and even your original VA mortgage lender. Contacting a variety of lenders could result in obtaining the best rate feasible while also saving cash on closing costs. Be wary of any potential lenders who contact you stating they are the only financial institution that is qualified to offer you an IRRRL, as any lender will probably be able to handle your streamline request. You can click on the Call ME button to the right, or fill out the Inquiry form on the left to have us put you in touch with one of our pre-screened lenders, authorized by both MHAF, and the VA to offer IRRRL loans in all 50 states.
Cash out is absolutely NOT permitted on any VA streamline refinance. An IRRRL should be a VA to VA refinance, and the eligibility designated for a VA mortgage must have been utilized on the house on which the loan is being refinanced. An existing second mortgage or HELOC (Home Equity Line of Credit), will most likely prevent use of the IRRRL loan, as the existing second lien holder would be required to re-subordinate to the proposed new VA loan. Re-subordination was common just a few years ago, but now it is unheard of.
It is NOT require that you are currently living in the home. While you may have had to occupy the house to qualify for the purpose of the original VA mortgage, to qualify for the purpose of the IRRRL you only have to certify that the house was previously occupied by you.
Click on the Call Me Button on the right, or the Inquiry Form on the left, to have one of our pre-screened lenders help you save money.