What Is a VA Streamline Refinance Loan Or IRRRL?
The Department of Veteran Affairs offers an Interest Rate Reduction Refinance Loan or the IRRRL program, also known as the VA Streamline Refinance plan. The program can be a great option for homeowners, whose primary mortgages are VA loans, and who want to take advantage of lower refinancing interest rates for reducing monthly mortgage payments. The approval criteria could be less stringent than those that apply to various other programs.
VA Streamline Refinance Program – Understanding The Basics
By getting fast approved for a low rate VA streamline loan to refinance your home, you can qualify for a sustainable interest rate. The fees for this program could be low and in some cases there may be no charges at all. Besides, when your current mortgage is a VA backed home loan, you might not have to go through the process of determining your eligibility to obtain approval for the program. Thus, it is a good opportunity to get access to lower your mortgage interest rate and reduce payments. You can save precious dollars every month on mortgage instalments.
Determine Your Eligibility For The VA Streamline Loan
The main requirement to obtain approval for VA streamline mortgage or IRRRL program is that homeowners need to prove that they have occupied the house, which is to be refinanced, at some point of time earlier. To that effect, if you are currently rented your property because of being out station for new duty, you can still use the VA streamline refi plan to get your home refinanced. An additional condition states that you should have been current on your existing mortgage payments for the last 6 months and must not have more than one single 30 day late payment during the past 1 year.
Applicants are not required to furnish Certificate of Eligibility for VA streamline program, neither are they needed to undertake new home appraisals or go through a credit check process. However, it is always better to talk to several lenders and inquire about the qualification requirements before you apply for the plan. Borrowers could be needed to bear expenses towards nominal funding fee and closing charges for unpaid home loan balance with the VA streamline mortgage refinance program. And homeowners, who get compensation because of service related disabilities, could be altogether exempt from paying funding fee.
Why You Need To Apply For The VA Streamline Program
While you may have your own reasons to apply for VA streamline home refinance or IRRRL program, majority of the VA homeowners do so to lower their mortgage interest rates and reduce monthly payments. Even a one percent decrease in interest rate can help you in saving few precious dollars.
Some VA borrowers may prefer applying for VA streamline refinancing option as their existing home loan is an ARM, interest rates for which are about to reset. By shifting over to a fixed rate mortgage (FRM) at this stage, the monthly instalments will become more stable and predictable every month.
In addition, VA’s IRRRL loans have flexible terms and so, homeowner has the chance to select a term that can save money without trying to extend selected term later on.