Interest rates have dropped again and now is an excellent time to refinance your home loan. If you have a current VA mortgage you can save money with a VA Streamline Refinance. To get started speak with a VA approved lender. Not every mortgage lender is qualified so ask this question first. The actual program is called the Interest Rate Reduction Refinance Loan (IRRRL).
The IRRRL is designed to help current VA customers to save money by reducing their interest rate. This is beneficial for the VA and for borrowers because a lower interest rate loan improves a borrowers ability to make payments on time. Since it is a streamline refinance it can be completed faster than refinancing your loan outside of the VA. It can typically be finished within 30 days.
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What You Need to Qualify for a VA Streamline Refinance (IRRRL)
• Have a current VA home mortgage – If you are a veteran that has a loan outside of the VA you can refinance into a VA home mortgage, but it would not be under this program.
• On time payment history.
• Occupy the property – This does not work for rental properties.
• Benefit – Refinancing needs to reduce your monthly mortgage payment and save you enough money to make a difference. If you are refinance from an adjustable rate mortgage to a fixed rate mortgage the VA will make an exception.
• You cannot get cash out – This loan is to reduce the principal balance only.
The process for reducing the interest rate on your existing VA loan is fairly easy. Since the VA already has the loan, they are familiar with your payment history and the properties value. This means the underwriter will require less paperwork and may waive the appraisal requirement. The closing cost can also be rolled into the loan, so you don’t have to pay any money out of pocket. This is a win – win for families that are busy, but need to save money.
Reducing your interest rate can save you hundreds of dollars every month. The size of your mortgage loan will determine the amount of interest rate reduction you need in order to make refinancing worth it. For example, loans under $100,000 typically need to see an interest rate reduction of 1% or more compared to loan balances around $400,000 that can benefit from reducing the interest rate by 0.25%. To see how much money you can save by using the IRRRL speak with a VA approved mortgage lender and start the application process. Interest rates can change on a daily basis making it important to act quickly and lock in your interest rate when low rates are available. Rates have been dropping again, but there is no guarantee how long that will last. Speak with your mortgage lender today to make sure you can benefit before they climb again. Remember the VA streamline refinance can be used for any owner occupied property, even 2 to 4 unit homes.
