If you are a veteran or service member, you can refinance your home through the VA home loan program. Note that it is the same popular benefit that offers $0-down mortgages. If you are looking to reduce your monthly installment or lower the number of years remaining on the VA Home Loan, you can take advantage of VA IRRRL Loans.
Note that for more than thirty years, the U.S. Department of Veterans Affairs has offered Veterans as well as active-duty soldiers an inexpensive and efficient way to lower your interest rate on the VA Home Loan.
The VA Streamline Refinance Program can reduce your monthly outflow during COVID-19 through the IRRRL (Interest Rate Reduction Refinance Loan).
What is VA IRRRL?
If you are a homeowner looking to lower the interest rate on your current VA home loan, you can score an easy win with the IRRRL (Interest Rate Reduction Refinance Loan). In many cases, an IRRRL does not require a VA appraisal, and you do not have to go through the conventional VA lender underwriting process. And, this saves plenty of time, fees, and paperwork.
The IRRRL makes your existing mortgage cheaper by lowering the mortgage rate to prevailing market rates.
If you are a homeowner with a VA loan, it is one of the simplest loan products to apply for and comes with more lenient loan requirements than traditional mortgages.
(READ: Q&A for the VA and FHA First Time Home Buyer)
Benefits of a VA IRRRL Refinance
There is no doubt that there are many benefits to IRRRLs. These loans come with few qualifying terms ad requirements and have low upfront costs. In addition, you can finance up to two discount points in order to reduce your interest rate even further. Refinancing using a VA refinance loan can also get you a more affordable interest rate or a considerably lower monthly payment.
Moreover, if you have an adjustable-rate mortgage (ARM), refinancing via an IRRRL will allow you to easily lock in a fixed rate with consistent monthly payments. Moreover, the flexibility and convenience of a VA IRRRL loan is another excellent reason to consider it.
Note that even if you are several years into your existing VA loan, you can still choose a loan term that will save you money without extending the period it will take you to repay it.
Compared with a conventional refinancing, the IRRRL is certainly streamlined. The IRRRL offers the following benefits…
Summary of VA IRRRL Benefits:
- No appraisal fee
- You don’t require a minimum credit score when applying for a VA IRRRL
- Monthly mortgage insurance is also not required
- No income or credit underwriting requirements
- You will not incur any out-of-pocket costs if you decide to roll the closing costs of the loan into your new loan amount
*Final Tips
As the IRRRL process is quite simple, these loans are usually a hassle-free and quick route to mortgage refinancing, provided you are eligible. However, make sure that you get quotes from multiple lenders, as interest rates and loan terms may differ from one lender to the other. In addition, by getting quotes, you can negotiate interest rate offers, which might reduce your mortgage rate further.
