VA Interest Rate Reduction Refinance Loan (IRRRL)

Program Overview

The VA Streamline Refinance program, commonly referred to as Interest Rate Reduction Refinance Program, is a specialized mortgage program for existing VA mortgages.  A Streamline Refinance allows veterans who currently have a VA Loan to refinance into a lower interest rate, reducing monthly mortgage costs.

This refinance type is relatively easy and can be completed quickly, due to the fact that borrowers are refinancing from one VA Loan product to another.  VA Streamline refinance loans feature little paperwork and often require little-to-no costs out of pocket.  Borrowers can roll closing costs into their overall loan amount.  Some homeowners can also secure a Streamline refinance without an appraisal.

To avoid out-of-pocket costs, borrowers can choose to roll the closing costs and fees into the balance of the loan.

Program Availability

Not every home owner is eligible for the VA Streamline Refinance program, nor does every lender offer this program.  At AMEC, we work with over 40 lenders from across the country and we can work with you to help you determine if you may be eligible.

The first step is to determine whether your mortgage is insured by Department of Veteran Affairs (VA).  If you need assistance in determining whether or not you currently have a VA mortgage, contact us today at (920) 632-4902 and with some basic information about your current mortgage and we can assist you in finding this information out within a few minutes.

Additional Eligibility Requirements

Now that we have determined that you currently have a VA mortgage, the next step is to ensure that you qualify for this great program.  To be eligible for this program you must meet these basic requirements:

  • You must refinance a property on which you have already used your VA loan eligibility
  • Must be current on your mortgage with no more than one 30-day late payment within the past year
  • Refinancing must result in lowering your monthly principal and interest payments, or under certain circumstances, the conversion of an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
  • No cash may be taken out on mortgages refinanced using the streamline refinance process.

Loan Limits

The VA does not set a cap on how much you can borrow to finance your home.  However, there are limits on the amount of liability VA can assume, which usually affects the amount of money an institution will lend you.  The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment.

These loan limits vary by county, since the value of a house depends in part on its location.

The basic entitlement available to each eligible Veteran is $36,000.  Lenders will generally loan up to four times a Veteran’s available entitlement without a down payment, provided the Veteran is income and credit qualified and the property appraises for the asking price.

See Loan Limits for more information about the limits in your county.

VA Funding Fee

Generally, all Veterans using the VA Home Loan Guaranty benefit must pay a funding fee.  This reduces the loan’s cost to taxpayers considering that a VA loan requires no down payment and has no monthly mortgage insurance.

The funding fee is a percentage of the loan amount and for the VA Streamline Refinance program the funding fee is .5%.  You have the option to finance the VA funding fee or pay it in cash, but the funding fee must be paid at closing time.

You do not have to pay the fee if you are a:

  • Veteran receiving VA compensation for a service-connected disability, OR
  • Veteran who would be entitled to receive compensation for a service-connected disability if you did not receive retirement or active duty pay, OR
  • Surviving spouse of a Veteran who died in service or from a service-connected disability.

Have Additional Questions?

If you have additional questions about getting mortgage help, we are available 24/7 to answer any questions you have about the Home Affordable Refinance Program.  Give us a call at (920) 632-4902 today.

Research shows that homeowners who work with housing experts like those at AMEC are more successful and have better long-term outcomes.  We will help you understand your options, design a plan to suit your individual situation and prepare your application.

 

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