VA IRRRL (Streamline Refinance): Simplify Your Mortgage and Save
You’ve served your country and made the most of your VA benefits by purchasing a home with a VA loan. It may be time to refinance your current loan to make it more affordable through a streamlined, simple process.
A VA Interest Rate Reduction Refinance Loan (IRRRL) provides an efficient way to lower your interest rate and monthly mortgage payments, using less documentation than your current VA loan required. Similar to the VA purchase loan, it’s meant to help active-duty military, veterans, and their surviving spouses finance homes affordably.
Explore your VA IRRRL options
What is a VA Interest Rate Reduction Refinance Loan?
The VA Interest Rate Reduction Refinance Loan (IRRRL), commonly known as a VA Streamline Refinance, is a program designed to help veterans and active-duty service members refinance their existing VA loans with minimal hassle.
This streamlined process often requires no appraisal or income verification, making it quicker and more accessible than traditional refinancing options. The primary goal is to reduce your interest rate and monthly mortgage payments, enhancing your financial stability.
How to Get a VA IRRRL
Securing a VA IRRRL involves several key steps:
- Confirm Eligibility: Ensure you have an existing VA-backed home loan and meet the program’s requirements.
- Select a Lender: Choose a VA-approved lender to guide you through the refinancing process.
- Application Process: Submit the necessary documentation, which is typically less extensive than traditional refinancing applications.
- Loan Processing: The lender will process your application, verify eligibility, and prepare the loan for closing.
- Closing: Sign the final documents and begin enjoying the benefits of your new loan terms.
At Redmond Mortgage Company, our experienced team is here to guide you through each step, ensuring a smooth and efficient refinancing experience.
VA IRRRL Requirements to Meet
To qualify for a VA IRRRL, borrowers typically need to meet the following criteria:
- Existing VA Loan: The mortgage to be refinanced must already be VA-insured.
- Payment History: The existing VA loan must be current, with no more than one 30-day late payment in the past 12 months.
- Seasoning Requirement: At least six consecutive monthly payments must have been made on the VA-insured mortgage, and at least 210 days must have passed since the first payment.
- Net Tangible Benefit: The refinance must result in a net tangible benefit to the borrower, such as a reduction in the interest rate or monthly payment.
- Occupancy: You must currently occupy the property or have previously occupied it.
- No Cash-Out: Cash-out refinances are not permitted under the VA IRRRL program.
Benefits of a VA IRRRL
- Simplified Process: Reduced documentation requirements, including no need for income verification or home appraisal.
- Lower Interest Rates: Potential to secure a lower interest rate, reducing monthly mortgage payments.
- Faster Closing: Streamlined procedures can lead to quicker loan processing and closing times.
- Minimal Out-of-Pocket Costs: Closing costs can often be rolled into the new loan, minimizing upfront expenses.
- No Private Mortgage Insurance (PMI): VA loans do not require PMI, even when refinancing.
Why Choose Redmond Mortgage?
At Redmond Mortgage Company, we specialize in helping veterans and active-duty service members navigate the refinancing process with confidence. Our experienced team offers personalized guidance, competitive rates, and a commitment to finding the right mortgage solution for your unique needs.
VA IRRRL FAQs
Your home is a major investment. It’s ok to have questions about refinancing it. We’ve compiled answers to the frequently asked ones, but don’t hesitate to ask more.
You can refinance your current VA loan with a VA IRRRL after you’ve made at least six full mortgage payments on the current mortgage you have from purchasing your house. This means you can refinance as soon as seven months (210 days) from the date of your original closing.
First you need to currently have a VA loan to move forward with a VA IRRRL.
Like the VA Loan, eligibility for the VA IRRRL is service-based and proven through a Certificate of Eligibility (CoE) from the U.S. Department of Veterans Affairs. The VA evaluates eligibility based on your service status, your years of service, and your service record.
You may meet eligibility requirements if you are:
• A current active-duty military service member,
• A military veteran, or
• The spouse of a service member, including a surviving spouse
Detailed guidelines are available on the VA’s website. With a VA IRRRL we can often use the CoE you have on file for your current VA loan to meet the requirements to refinance. If you don’t provide it directly, we can help you by getting it from the VA’s online portal.
You’ll also need to meet other loan requirements and provide some documentation, but the process is simpler than with a VA purchase loan, making it easier to get approved.
The VA IRRRL is only available to those who currently have a VA loan. It provides a unique benefit to servicemembers, veterans, and eligible surviving spouses. Because it uses a streamlined process, it makes lowering your interest rate and monthly payments fast and simple. The VA IRRRL is so efficient to process that it also allows for benefits like lower loan origination fees, meaning you pay lower closing costs.
This simplicity comes with fewer qualification requirements but also means you may have fewer refinance options.
A conventional refinance can be done from various types of purchase loans, including a VA loan. It provides broader options for rate and term refinances or cash-out refinances. However it also requires more documentation, more time, and a higher credit score for approval.
The VA IRRRL is a streamlined rate and term refinance, meaning its purpose is to lower your interest rate through a simple and efficient standardized process. For this reason it doesn’t allow for borrowing cash from the value of your home. There are other loan programs through the VA that provide cash-out refinance options, which require more documentation.
To ensure the program is financially sustainable for all eligible veterans, the VA funding fee for the VA IRRRL is a one-time cost of 0.5% of your loan amount.
The VA also allows for exceptions around paying the funding fee. This includes Purple Heart recipients, veterans with service-related disabilities, and surviving spouses of veterans in certain circumstances.
Along with the VA funding fee there are closing costs that range from 1-3% of the loan amount. Both the funding fee and closing costs can be paid upfront or be rolled into your loan to be paid monthly. Rolling them into your new loan may increase your interest rate.