• Catherine

Veterans & Military Personnel Can Streamline Their Refi

Updated: Jul 24, 2019

One of the most significant and valuable benefits available to our country’s military personnel and veterans is the VA Loan. Backed by the Veterans Administration, this loan allows vets to purchase a home with little or no money down. The advantages gained from this benefit can extend to refinancing a mortgage as well by using an Interest Rate Reduction Refinancing Loan (IRRRL), also called a VA Streamline Refinance.

As with many refi opportunities, an IRRRL is typically used to reduce the borrower's interest rate – and therefore, monthly payment – or to convert an adjustable rate mortgage (ARM) to a fixed rate loan. Historically low interest rates are adding to the current appeal of refinancing.

A few IRRRL facts:

  • No appraisal or credit underwriting package is required

  • IRRRL must be refinanced on an original VA loan

  • No new loan certificate of eligibility is required

  • You may NOT receive any cash out from the loan proceeds

As one of the simplest refinancing processes available, the IRRRL doesn’t require an appraisal or credit underwriting package. Because it can only be used on an original VA loan, it’s already qualified and therefore doesn’t require a new certificate of eligibility – although a copy of the original may be requested by the lender.

Up to $6,000 of energy efficient improvements can be added to the refi loan, however the amount refinanced cannot exceed the amount of the original loan. This may also be relevant if the purpose is to refinance a 30-year mortgage down to 15 years. Borrowers cannot receive any cash out from the IRRRL, and it’s important to note that if you’re refinancing from an existing VA ARM to a fixed rate loan, it’s possible the interest rate will increase. In addition, while primary occupancy was required for a securing the original VA loan, you need only to verify that you did reside there previously for the streamline refi.

With record low interest rates right now, there has been an increase of unsolicited and shady offers of VA refinancing. Because you can get an IRRRL with most qualified lenders, the Administration urges veterans to beware of false claims of exclusive VA lending capabilities. You can get more facts about the benefits and eligibility at ww.benefits.va.gov/homeloans/irrrl.

We at EnTrust Funding (ETF) know you have choices and are happy to answer your IRRRL questions and provide up-to-date and competitive rates. We understand that your home is an asset – let us help you make sure it’s working for you.

And thank you for your service.

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