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VA Streamline FAQ's

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What is an IRRRL?

An IRRRL is the VA's Interest Rate Reduction Refinancing Loan, also known as a VA Streamline Refinance. An IRRRL is a loan that refinances your existing VA Loan into a new VA Loan with a lower interest rate, or from an adjustable rate mortgage (ARM) into a fixed rate mortgage. A Certificate of Eligibility is not required for an IRRRL.

Do I have to be eligible for a lower interest rate in order to qualify for a VA IRRRL?

Not necessarily. In order to qualify for an IRRRL, the VA requires you to obtain a lower interest rate if you are going from a one fixed rate mortgage to another fixed rate mortgage, but if you are going from an adjustable rate mortgage to a fixed rate mortgage, the VA will allow you to refinance to a higher interest rate.

If it is called an Interest Rate Reduction Loan, why does the VA allow me to refinance my ARM to a higher interest rate?

Since you are refinancing your adjustable rate mortgage into a fixed rate mortgage the interest rate may be higher initially, but you will save money over time. With adjustable rate mortgages you may get a lower interest rate than a fixed rate mortgage for the first few years, but after that your interest rates increase and you are paying higher rates than you would with a fixed rate mortgage. This is why the VA allows you to refinance into a higher fixed rate of interest on your mortgage before your adjustable rate on your current mortgage increases.

Can I refinance with the VA if I am already using my Loan Guarantee entitlement with my current mortgage?

Yes. As long as you are refinancing your VA-guaranteed mortgage, then you can use this program to get more favorable loan terms and save money over the long run. If you're ready to get started with your VA Refinance, contact us today.

What out-of-pocket expenses will I have when refinancing?

None. The VA allows you to finance all closing costs associated with refinancing into your new mortgage. You may have some fees, but you will need to consult us to discuss the options of a zero closing cost loan vs including some costs into you balance to buy down to a even lower rate.

Do I have to use my current lender to refinance?

No. In most cases we can give you a lower rate and lower costs then your current lender and we will not put you on a waiting list. If you want a new lender, you can choose from any mortgage lender on the VA-approved lender's list. Don't let your current lender or any other lender deceive you into thinking they are the only lender that can refinance your VA loan. We promise to help you get one of the best loan terms avalable for you and your family.

Do I have to go through the credit check and appraisal process again when refinancing?

The VA does not require another credit check and appraisal because it has already approved you for the loan guarantee in the first place. However, we are required to check your credit to make sure you have a credit score of at least 620 and have not been more then 30 days late on your current VA loan in the last 12 months. We DO NOT require an appraisal when refinancing with a VA IRRRL.

Do I have to get another Certificate of Eligibility?

No. You have already been approved by the VA for your home loan guarantee, and refinancing does not require a Certificate of Eligibility.

Keys with a VA Loan

What fees does the VA charge for an IRRRL?

The VA requires a .50% funding fee of the balance of your new loan. ie. $100,000 loan = $500 fee. This can be added to your loan balance. There are no other VA fees involved, however you will have other normal closing costs that can be paid by your lender for you. If the veteran currently has VA disablity they are able to have the funding fee waived.

Does the VA have any requirements for me to get an IRRRL?

The VA has the following eligibility requirements for an IRRRL:

  • You must be refinancing an existing VA Loan into a new VA Loan in order to use this program. This can be on your primary, 2nd home or a rental home if it already is under your VA eligibility.
  • You need to certify that you have been occupying the property. For your original loan you had to sign an agreement stating you would be the primary occupant of the home, and now you will have to sign an additional agreement saying that you have been the primary occupant.
  • You cannot take more out on your new loan than what you currently owe. The loan can be more only as a result of fees and closing costs being financed into the mortgage if any.

Can I take cash out of an IRRRL?

No. An IRRRL from the VA is only for the purposes of obtaining a better interest rate on your mortgage loan in order to save you money over time.

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