If you’re eligible for the VA home loan program, you have access to perhaps the best mortgage for those who want to finance a purchase without any down payment along with restricted closing costs. Who qualifies? Veterans of the armed forces qualify as do active duty personnel with at least 181 days of service. Those with at least six years of service in the National Guard or Armed Forces Reserves qualify as do surviving spouses of those who have died while in active duty or as a result of a service-related injury. But the VA program has another benefit that conventional loans do not have- the Interest Rate Reduction Refinance Loan, or more commonly know as the “IRRRL”
The IRRRL is a refinance loan program that drastically reduces the paperwork and process required when approving a VA refinance application. Lenders often refer to the IRRRL as a VA streamline. As long as the existing mortgage is in fact a VA loan, homeowners can take advantage of the streamlined program. What are some of the advantages with the VA streamline refinance?
There is no need for another appraisal. That literally means you can be “upside down” with your mortgage and still be able to qualify. There is no minimum credit score required, either. However, individual lenders may require a credit report to verify timely mortgage payment history.
The borrowers cannot have more than one payment made more than 30 days past the due date within the previous 12 months and no such lates within the past six months. There is no employment verification as well. This means you don’t even have to be employed in order to qualify. You won’t be asked to provide copies of your pay check stubs or LES statements. No W2s are required. When you consider the reduced documentation with the VA IRRRL, you can easily see why lenders do refer to this program as the “VA streamline.”
The VA streamline must be used to refinance from a fixed rate to a lower fixed rate and you can also use the program to refinance out of an adjustable rate or hybrid mortgage into the stability of a fixed rate even though the fixed rate might be a bit higher than you currently have with a variable rate. As it relates to your certificate of eligibility, there’s no need to request a new copy as your lender will handle the duties of keeping your COE active on your loan. There is no cash out allowed with the VA streamline but you can roll closing costs into your new loan. You don’t even have to currently occupy the property to use the VA IRRRL as long as you used your VA eligibility when you first purchase the home and the existing loan is still a VA mortgage.
Note: buyers that do have equity can learn about the 100% VA Cash Out Refinance here
If you have an existing VA home loan and have considered refinancing to a lower rate or to switch from a variable rate into the stability of a fixed rate loan, speak with a loan officer experienced with the VA home loan program. Even if you think you might not qualify due to income or valuation concerns, then you need to explore the possibility of a new VA streamline mortgage.
VA Mortgage Hub serves Vets across the nation – Atlanta, Jacksonville, Pensacola, Charlotte, San Diego, Chicago, Houston, Phoenix, Seattle, Los Angeles. They can be reached at 904-385-3988 or by visiting www.VaMortgageHub.com