What is the VA IRRRL program?
A VA Interest Rate Reduction Refinance Loan (IRRRL), also known as a VA Streamline Refinance, is a quick refinance for service members and veterans with few requirements needed from the borrower.
An IRRRL refinance does not require an appraisal or go through the typical VA lender underwriting process which saves a lot of time, paperwork, and fees. It essentially allows veterans and military families to refinance their existing VA loan to a lower rate or convert from adjustable to fixed-rate financing without a lot of paperwork or hassles.
How do I qualify?
VA Streamline Refinances are only available to those with existing VA-backed home loans. To qualify, the borrower must have a seasoning period of either 210 days from the date of the first payment or after the sixth monthly payment before a VA loan can become eligible for an IRRRL.
Other basic eligibility requirements for VA streamline refinances include:
- The borrower must be using the IRRRL to refinance their existing VA-backed home loan
- The borrower must certify they currently live in or used to live in the home covered by the loan
- The borrower must use a Department of Veterans Affairs-approved lender
- The refinance must result in a real financial benefit
Why choose a VA IRRRL?
In essence, a VA IRRRL is used to refinance one VA mortgage into another improved VA loan. With it, the borrower will boast a lower payment, lower rate, or both! The positives of refinancing may allow for the monthly payments to be more stable by moving from an adjustable-rate loan to a fixed-rate loan.
Another perk is the borrower does not have to currently live in the home to qualify for a VA IRRRL and can use it to refinance a property they are renting out; they simply have to prove they have previously lived there.
As far as closing costs, a VA IRRRL allows these to be rolled into the loan balance or priced into the interest rate.
The borrower will also have a VA funding fee but may be exempt if they have the proper disability rating from the VA. This fee can be rolled into the refinance. For most borrowers, this means a 0.5% charge based on their current loan amount.
VA IRRRL’s do not allow the borrower to take cash out. For that, a VA cash-out refinance might be better suited.
Bluefire Mortgage Group is an approved Department of Veterans Affairs-approved lender. If you have any questions about VA IRRRL’s, or mortgage options in general, please reach out to us at (760) 930-0569 so we can better assist you.