One of the most common reasons for refinancing a mortgage is to remove the name of a borrower. But the process could be a little bit more complicated with VA loans. This is because the general rule is for the the veteran’s name to remain on the mortgage. But what about when the veteran passes away, leaving only a surviving spouse to continue the payments?
The death of the veteran could be an exemption to this rule. In this case, the IRRRL might still apply to allow the surviving spouse to still take advantage of VA loan benefits.
Co-Borrower Change Guidelines
To help clear up confusion and some misconceptions, the following state the guidelines for change in borrowers in the event of re/marriage, divorce, and death.
- An unmarried veteran can add a spouse with an IRRRL.
- A veteran who is divorced can remove a former spouse via the IRRRL.
- In the case of remarriage, the divorced veteran can both remove the previous spouse’s name and add the new spouse’s name through IRRRL.
- An eligible veteran can change the entitlement of a VA loan via the IRRRL, even when the original mortgage was purchased by another veteran.
- A spouse who’s veteran partner passed away can still refinance the loan.
- A veteran can remove a non-spouse with whom he or she originally signed the first mortgage with via IRRRL.
- The divorced spouse of an eligible veteran cannot use IRRRL to refinance.
- The surviving spouse of a veteran cannot refinance via IRRRL if they married after the purchase was made and the veteran dies.
- The surviving spouse of a veteran cannot refinance via IRRRL if she or he was not on the original loan and the veteran dies.
- A non-spouse, non-veteran cannot refinance under IRRRL even if she or he originally purchased the property with an eligible veteran who is now deceased.
If you still have doubts and questions about your eligibility, please feel free to speak with an expert.