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Mortgage rates continue to drop to record lows right now. That has many homeowner’s scrambling to refinance existing mortgages. If you have a VA loan you may be asking, “Is now the time to refinance?”Interest Rate Reduction Refinance Loan (IRRRL),  are also known as a VA Streamline Refinance. They have a simplified approval process and are therefor happen pretty quickly. The IRRRL was created to help military families and veterans replace existing adjustable VA loans to fixed financing rates in a smooth, easy manner.  We’ve also helped borrowers refinance to reduce to a shorter term, using the IRRRL to move from a 30-year mortgage to a 15-year mortgage. The monthly payments in these cases are not lower, but borrowers are happy to reduce the amount of interest they would pay over time. Additionally, many of the traditional requirements are waived with the IRRRL, which reduces the fees paid as well.

Am I eligible for an IRRRL?

There are still some requirements and restrictions even though the process has been fully simplified for military families and veterans currently in an existing VA loan:

  • A borrower must refinance from one VA Home Loan to another VA Home Loan; it cannot be used to pay another type of loan
  • You cannot request a loan more than the actual amount owed other unless it includes rolling in the closing fees associated with the new loan
  • You must verify you lived in the property during your initial VA Home Loan (but you are not required for it to be primary residence during IRRRL)
  • VA Funding Fee of .5% (this fee is waived for service-connected disabilities or surviving spouses)
  • You may not receive cash back

Benefits of A Streamlined Process

Because the IRRRL loan process is even easier to navigate than the VA Home Loan process, these streamlined loans are quite popular with both borrowers and lenders.

Here are additional advantages of using the IRRRL loan:

  • No Certificate of Eligibility (COE) needed
  • No or very little out of pocket expense to the borrower
  • No credit underwriting as long as the mortgage has been paid for previous 12 months
  • No appraisal
  • May include up to $6,000 for energy-efficient home improvements
  • Why Borrowers Choose An IRRRL
  • With an IRRRL borrowers may lower the monthly mortgage payment by refinancing for reduced interest rates. Some borrowers stabilize monthly payments by shifting from variable or adjustable interest rates (ARM) loans to a fixed rate loan.

Not sure if the VA IRRRL loan is the right fit for you? Our VA Loan specialists are happy to discuss this streamlined process to see if this option fits your financial needs and goals. Contact us today to learn more!

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