The VA IRRRL, or VA Interest Rate Reduction Refinance Loan, simply known as the VA Streamline Refinance is a refinancing option for people who currently have an existing VA Loan. By looking at the name, VA Streamline Refinance, you will notice the word Streamline, which in this case is a good sign because in order to Streamline the process, this is a minimal document loan. What this means is that a lot of the documents that would be required under a standard refinance or purchase is not needed like income verification, bank statements, or even a current appraisal of the home. In the following sections of this article, we are going to go through the various parts of the VA Streamline Refinance so that hopefully you can put this knowledge to good use when looking to refinance your VA Loan.
Before we go into what a VA Streamline Refinance, it is smart to know the basics of the VA Loan to give you an understanding of the original loan and how the streamline refinance works. VA Loans are loans designed only for veterans of the military or surviving spouses of military members who were killed in the line of duty fighting for our country. In order for someone to obtain a VA Loan, it is required that the borrower has a Certificate of Eligibility or COE for short which certifies that the borrower has served for the adequate time necessary for a VA Loan. In order to obtain your COE you will need to have put in the following service requirements: 90 days of service during wartime, 181 days of service during peacetime, 6 years in the Reserves or National Guard, or a surviving spouse of a member who was killed in the line of duty. Aside from this, there aren’t any many other pertinent guidelines for these loans as there is not a required credit score needed for a loan, however most lenders will want at least a 620 FICO. However, at Loan Consultants we have the access to getting you a VA Loan with as little as a 580 FICO score. VA Loan Guidelines also don’t require a debt-to-income ratio with most lenders enforcing a 50% debt to income ratio. Once again, this is where Loan Consultants shines as we have seen debt to income ratios go to 60% and the loan was still approved and closed on time. Just a reminder, if you are looking for a VA Loan, you need to do your homework and make sure you work with a lender who can offer the best guidelines to fir your situation. We try to deal with the least amount of lender overlays as possible. Lender overlays are additional requirements by the lender to the minimum requirements of loan programs in order to make approved borrower less risky than by doing loans for someone with the minimal requirements. Here at Loan Consultants we want to make sure we can help nearly every borrower which is why we only work with lenders who have minimal to zero overlays.
For borrowers with existing VA Loans are in real good shape for a VA Streamline Refinance since they were already vetted and approved for a VA Loan in the first place, there is minimal documentation needed in order for them to be processed. Aside from having the minimal documentation requirements, you are also allowed to roll your closing costs into the loan so that you don’t have to come out of pocket for any expenses related to this loan. There are a few requirements for VA Streamline Refinance in order to qualify for this program and they are: Current on your mortgage with no more than one 30-day late in the last 12 months, No cash-out is received from the IRRRL or Streamline Refinance, New mortgage payment must be less than your current payment, and certification that you are occupying the property.
In this blog, we will discuss and cover VA streamline refinance guidelines and requirements for homeowners with a current VA loan. The U.S. Department of Veterans Affairs has a fast-track refinance mortgage loan program on VA loans called VA streamline refinance. Homeowners with a current VA loan can refinance their loan at a lower rate with no appraisal or income documentation or verification. Most VA streamline refinance close in two weeks and is a simplified refinance loan process with limited documentation required.
VA loans are the best home mortgage program in the nation. However, not everyone can qualify for a VA loan. Borrowers need to either be active and/or retired members of the United States Armed Services with a valid Certificate of Eligibility (COE). One of the greatest benefits of being a veteran of the United States Armed Forces is qualifying for a VA loan. VA loans is probably the best mortgage loan programs in the United States. Lenders can offer 100% financing with no mortgage insurance at low rates on VA loans due to the government guarantee. This because of the following:
VA loans have lenient agency mortgage guidelines than any other loan program.
https://www.youtube.com/watch?v=y2gkcDSQakU VA loans are specifically only for veterans of the United States Armed Forces. VA loans are guaranteed by the Department of Veteran Affairs. Approved mortgage lenders have very little risk in originating and funding VA loans. This because the Department of Veterans Affairs guarantees VA loans in default against losses. That is why VA loans have zero down payment requirements and very low mortgage rates and no mortgage insurance required
Homeowners with a current VA loan can now refinance their current high-interest VA loan with a VA Streamline Refinance. This holds true as long as they can benefit from a lower mortgage rate. Mortgage rates are at historic lows. Many homeowners with higher mortgage rates on their VA loan can benefit by refinancing with an IRRRL at today’s low mortgage rates:
There is no appraisal required and no income verification required.
To qualify for an IRRRL, borrowers need to be current on their VA loan for the past 12 months.
The borrower’s credit scores determine mortgage rates on VA loans.
Homeowners with VA Loans can also qualify for a cash-out VA loan. A homeowner can get up to a 90% loan to value on cash-out VA refinance mortgage loan. Unlike the VA streamline refinance mortgage loan, with a cash-out refinance VA loan, borrowers need to have a new appraisal and income documentation, and credit scores are required. Borrowers do not have to go with their current VA mortgage lender. Homeowners can pick any VA approved mortgage lender for their cash-out VA refinance mortgage loan.
VA Loans is the best loan program in the United States. Lenders can offer VA Loans with 100% financing and no mortgage insurance to qualified borrowers. VA mortgage interest rates are often the lowest out of all loan programs. VA Loans often has lower mortgage rates than conventional loans. This is due to the government guarantee by the Department of Veterans Affairs. VA partially insures and guarantees lenders in the event borrowers default on their VA Loans and the property goes into foreclosure. Homeowners with a higher mortgage interest rate VA Loan can refinance their current loan with a new VA loan at a lower rate. This is VA IRRRL.
Homeowners with a current higher interest rate VA Mortgage can refinance it with a lower rate VA Streamline Refinance Loan. VA Streamlines are also referred to as IRRRL. It is a fast track VA refinance loan program. One of the easiest and fastest refinance loan program similar to FHA Streamline Refinance. Requires limited documents, no appraisal, no income documents, and takes no longer than two weeks. Loan Consultants is a national lender with no overlays on VA Loans, only goes by VA Streamline Refinance Mortgage Guidelines with zero overlays.
Per VA Streamline Refinance Mortgage Guidelines, VA offers lenders offer a fast track refinance loan program to existing borrowers with VA Loans called VA Streamline:
90% loan-to-value allowed on VA Cash-Out Refinance Mortgage.
The economy is very hot. The stock market is hovering in the 25,000 mark range. The Dow Jones Industrial Average has never been this high. Since President Donald J. Trump took office, the Great Recession has parted ways. Housing prices have skyrocketed year after year. HUD and FHFA has increased FHA and Conforming Limits the past three years due to rising home prices. Mortgage Rates have been the highest since the Housing Bubble Burst back in 2008. Despite record-high mortgage rates since 2008, the housing boom is in more demand quarter after quarter. No doubt there should be a mortgage rate correction coming sooner than later.
When rates drop, every homeowner should consider doing a VA and/or FHA Streamline Refinance. Most than likely, homeowners do not have to bring any money to closing. Closing can take place at the homeowner’s residence. Current escrows will be closed and proceeds will be refunded to the borrower. Often times, homeowners will skip two monthly mortgage payments. Save money due to lower rates. Lower monthly mortgage payments. Very easy mortgage process with little paperwork required and two-week closing.
In order for lenders to proceed with Streamline Refinancing, borrowers need to meet net tangible benefit requirements:
Mortgage Rates are currently the highest it has been since the 2008 real estate and credit meltdown. However, the indication is that rates may drop in the coming months.
When rates drop, homeowners with higher rates should be prepared in exploring doing a VA IRRRL:
There are Loan Level Pricing Adjustments (LLPA) for the following:
Borrowers can qualify for VA Streamline Mortgages during and after bankruptcy:
As you can see a VA Streamline Refinance is a great loan option for you to reduce your interest rate and your monthly mortgage payment without having to come up with a lot of documents or even closing costs to get the loan done. This is why for a veteran of the military, using your VA Loan benefits has its definite advantages than going after a loan via another program. The common rule of thumb is that if you can get an approval from another loan program like an FHA, USDA, or Conventional Loan you will almost always be able to get a better rate going with a VA Loan that you rightfully deserve. If you still aren’t 100% comfortable with the VA Loan program, please reach out to us Loan Consultants at 844-275-2007. Just give us a call or text and we will be happy to assist you. We look forward to hearing from you today!