Dollers and Sense: VA Streamline Refinances Are Also Called the Interest Rate Reduction Refinance Loans

Doug and Melanie Sedam

Are you eligible for a VA Streamline Refinance (IRRRL)?

If you currently have a VA loan and would like to (and why wouldn’t you?) lower your interest rate and/or monthly payments, you should consider a VA streamline refinance.

To be eligible for a VA IRRRL, you only need three things. You should currently have a VA loan, you currently live or have lived in this home, and you should be current on your mortgage with no more than one 30-day late payment in the last 12 months.

What are the benefits of a VA IRRRL?

VA IRRRLs are probably the easiest mortgage out there; it’s no wonder they are called “streamline refinance.”

* You do not need to provide any income documentation.

* There is no home appraisal required. So, it does not matter what the current value of your home is.

* A bank/asset documentation is not required if your cash to close is $0.

* The new rate and the monthly payment will be lower than your previous payment. This does not necessarily apply if you are moving from an Adjustable-Rate Mortgage (ARM) to a Fixed Rate Mortgage.

What is the funding fee for a VA Streamline Refinance?

Unless you are exempt, the VA funding fee for all streamline refinances is 0.5% of the loan amount. The fee is added to the loan amount, so you do not need to bring this money as a closing cost.

So, if your base loan amount is $200,000, you can add 0.5% (=$1,000) to the loan amount, making it a total of $201,000.

What is the rate and closing cost for a VA IRRRL?

VA Streamline Refinances have one of the lowest rates out of all mortgage programs. At our mortgage company, The Home Loan Pros, we offer extremely competitive rates to our veterans for refinancing their mortgages. Get a live rate quote by simply calling us!

Any closing costs paid during the refinance has to be recouped in 36 months. Fees, expenses, and closing costs (FECC) to be recouped are lender fees including credit report, and discount points. Excluded in FECC are costs like VA funding fee, per diem interest, escrow, and pre-paid charges for home insurance, property tax, etc.

Can I get cash-out with a VA Streamline Refinance?

Cash-outs are not allowed with VA IRRRLs. However, you can get up to $6,000 as part of Energy Efficient Mortgage (EEM) which you can use to remodel your home with allowable energy-efficient upgrades.

Also, if you are adding the prepaid (impound) reserves for property taxes and insurance as part of the new loan, your current escrow balance will be refunded to you by the lender a few weeks after the new refinance closes.

Melanie Sedam is the owner of The Home Loan Pros and is a HUD-certified loan originator. Melanie can be reached at 520-829-5219 ext. 2 should you wish to discuss how a reverse mortgage would work for you. The Home Loan Pros is an approved VA Mortgage Broker with stellar reviews and very aggressive VA IRRRL interest rates. Get started with your VA Streamline Refinance application today by calling Melanie Sedam at 520-829-5219 ext. 2.