VA Streamline Refinance (IRRRL):
If you have an existing VA loan, the Interest Rate Reduction Refinancing Loan (IRRRL) is a streamline refinance that allows you to take advantage of lower rates (when available) through a streamlined process. This simplified loan is for VA to VA refinances only and it will reuse the entitlement that you originally used.
The occupancy requirement for an IRRRL is different from other VA loans. When you originally got your VA loan, you certified that you occupied or intended to occupy the home. For an IRRRL you need only certify that you previously occupied it.
The loan may not exceed the sum of the outstanding balance on the existing VA loan, plus allowable fees and closing costs, including funding fee and up to 2 discount points.
Some Veterans use a VA IRRRL to reduce their loan term from 30 years to 15 years, however, this may result in a higher monthly payment even with a reduced interest rate.
Streamline Eligibility
If you’re interested in a VA Streamline (IRRRL) you must currently have a VA loan. One of our VA loan specialists will work directly with the VA to pull a Prior Loan Validation from VA’s website which documents your current VA loan status.
On-Time Payments
In addition, you are required to have made on-time payments over the past year, with no more than one payment that was 30+ days late in the past 12 months. If you did have a late payment, say, 8 months ago, you may want to wait 4 months before applying.
Waiting Period
As of June 1, 2018, the closing date of the new VA streamline loan must occur after both of the following events:
- It has been at least 210 days (about 7 months) since you made the first payment on your current VA loan.
- You have made at least 6 full payments on the VA mortgage being refinanced.
If you have met both conditions, you may be eligible for this loan.
The VA Streamline Refinance Must Improve Veteran’s Situation
The VA streamline has to put the borrower in a better financial situation. VA lenders may only approve streamline refinances that help the veteran.
The new payments on the VA streamline must be lower than your current payments. There are a few exceptions, like when you:
- Refinance an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
- Refinance into a shorter term
- Finance energy-efficient improvements into the VA streamline
To apply for a VA refinance or to find out more about whether you qualify, call one of our VA Home Loan Specialists at (208) 388-0500 or get started online.