Whether wanting to have a lower interest rate, converting a mortgage type or reducing the existing term or a loan, refinancing is usually the way to go.
Under the U.S. Department of Veterans Affairs, there is a very simple refinance option called the VA Streamline Refinance, also known as the Interest Rate Reduction Refinance Loan (IRRRL) program. This option is not only beneficial to those qualified but also powerful.
There are provisions under the IRRRL program that may be the best refinance option for you. It pays to do research about it. And before you raise any questions with a lender, it’s good to tap into the basics of the program.
What is the VA Streamline Refinance all about?
Like other refinancing options, the VA IRRRL lowers the interest rate of your existing VA loan to decrease the monthly mortgage payment, turn an Adjustable Rate Mortgage to a Fixed-rate Mortgage or adjust loan terms to a shorter period. However, shortening a term could mean a higher monthly payment.
Who can refinance through the IRRL?
Those with existing VA loans can only qualify for the VA IRRRL program. Given that it’s a VA to VA refinance, it maintains exclusivity within the two. In the event of a second mortgage, the holder should assume the VA loan as the first mortgage.
Why VA Streamline Refinance?
VA IRRRL is basically fuss-free given that it has less paperwork and little or no out-of-pocket costs. Most of the time, a VA Funding Fee is needed but it can be waived as long as the borrower meets a certain qualification such as having a service-connected disability and some others. If ever there is a funding fee, it can be paid through the new loan.
Through the benefits of the IRRRL, qualified veterans and military families get a good deal in saving mortgage costs. After all, the program’s aim is exactly just that. Summing it all up, it’s worth looking into.