VA IRRRL Streamline Refinance 12/16/2024
Guidelines and Rates
WHAT IS THE VA IRRRL Streamline Refinance?
Veterans seeking to improve their existing VA loan terms can leverage the streamlined program known as the “VA Interest Rate Reduction Refinance Loan.”
This program offers simplified steps by eliminating the need for income, employment, asset documentation, and potentially even an appraisal. Additionally, reduced closing costs with the option to roll them into the loan and eliminate upfront financial burdens.
VA 30-Year Fixed Rate
5.50% (5.7% APR)
VA 15-Year Fixed Rate
4.875% (5.2% APR)
*Scenario: loan amount of $400,000-660 FICO-95%LTV- SFR-CA. 12/16/24
VA IRRRL RATES
VA IRRRL rates consistently rank among the most competitive mortgage options available. This is largely thanks to the government backing provided by the Department of Veterans Affairs, which allows the lenders to offer exceptionally attractive interest rates on these loans.
It’s important to remember that individual VA refinance rates will vary based on several factors, such as loan size, credit score, home value, property type and more.
HOW THE VA IRRRL STREAMLINE REFINANCE WORKS
Similar to other mortgage refinances, the VA IRRRL will pay off your existing mortgage with a new loan. The new loan will start at 30 or 15 years, depending on your chosen term.
However, the process for this program is different from a traditional refinance.
There is no income and employment verification requirement. You DO NOT supply pay stubs, W2s, or Tax Returns. Since this program is to be used on an existing VA loan the lender already knows you’re VA-eligible.
Lastly, there’s no home appraisal. Not only can this save you a week or two in processing time it also saves you on out-of-pocket costs.
VA IRRRL program Pros and Cons
While the VA IRRRL program boasts numerous advantages, it’s important to acknowledge the limitations and potential drawbacks involved.
Pros
- No income documentation required
- No employment verification required
- No appraisal required
- No out-of-pocket costs
- FICO score can be lower than a 620
- $6,000 cash back for energy-efficiency improvements
Cons
- Current loan must be a VA home loan
- No cash-out over $500 unless it’s for energy-efficiency improvements
- New loan must have a lower rate and payment
- Waiting Period of 210 days or 7 months
- Funding fee of 0.5% is added to the loan amount unless VA has 10% or more disability rating
How to qualify for a VA IRRRL?
- Existing Mortgage: Current loan has to be a VA Home Loan.
- Payment History: Current with no more than one late payment in the past 12 months.
- Occupancy: The property is occupied by the borrower.
- Net Benefit: The new payment and rate must be lower unless the loan is refinancing an ARM or the term will be shorter.
- Waiting Period: Current VA loan has to be open for at least 7 months or 210 days.
It’s a great time to talk to a VA loan specialist when you’ve made at least 5-6 payments.
Contributed by: Victor Santos NMLS#888844 Onpoint Mortgage Pro NMLS #2134550
Victor Santos is a licensed mortgage loan officer with over 20 years of experience. He has spent many years assisting homeowners and home-seekers in obtaining the optimal solutions for their mortgage needs.