Updated January 2017
IRRRL Lenders: What You Want To Know
VA streamline refinance loans, or Interest Rate Reduction Refinance Loan, are an outstanding way for vets with VA home loans to refinance those loans to a reduced rate. If you are looking for an IRRRL you should be sure to educate yourself on the following advice when looking for a VA mortgage lender to do your IRRRL.
The VA does not lend you money for a VA loan, they only guarantee your loan in the event of default. The VA guarantee benefits the lender of the loan – there are several lenders that offer the VA loan service and are always happy to help.
VA-Approved Lender Facts
When participating in the VA IRRRL program, it is not a requirement that you use the same lender that you got your original VA loan from. Any VA-approved lender can make you an IRRRL. If you are contacted by a lender who tries to tell you he is the only lender who can make an IRRRL loan, just be aware that this is not the case.
Interest rates for the VA IRRRL will vary by lender. Interest rates are not set by the VA, and every VA-approved lender will set their own rates. Expect there to be different rates for different lenders at different times.
Interest rates change frequently, so it is important that you shop around to get the best rate and get your rate locked in before you quit shopping for a great VA lender with a great rate.
Another thing to be careful of is; if a lender tells you the VA requires closing costs, this is not true. The only fee the VA usually requires is a funding fee at the rate of 0.50% of the loan amount. The funding fee can be paid in cash, or it can be rolled into the loan.
Lenders who advertise a “No Cost” VA IRRRL loan are not being truthful, either. The fact is that there are closing costs and fees associated with any loan, but some lenders would rather not tell you about them and roll them into the loan where you will be paying interest on them for the next 15 or 30 years. The truth is, you can pay these fees up front and avoid the interest. If you see a “no-out-of pocket closing costs” advertised – then that is more accurate. There are closing costs involved – but they can be rolled into the loan.
How to Find a VA-Approved Lender
Make sure you shop around and talk to several different lenders. They may vary widely in the terms that they offer. They may also vary in lending requirements, such as income verification. Lenders are not required to check your credit score or get an appraisal of the home, but many of them choose to do so. You can easily check out lenders online and compare them.
Taking advantage of the VA streamline loan or IRRRL to lower your interest rates and monthly payments is a smart move, especially in today’s economy. If you are entitled to these benefits, why not go ahead and get started on an IRRRL Just take a minute to fill out the short form below to get matched with a VA-approved lender.