If you are considering a refinance and are a veteran of the United States military, you may qualify for a streamlined refinance from Veteran Affairs. Unless you work for the VA or are a loan expert like us, it can be difficult to understand how a VA streamlined refinance works and the benefits associated with one. For this reason we’ve created this guide on how to navigate a VA streamlined refinance.
What is a VA Streamline Refinance?
A VA streamline refinance loan is also referred to as an Interest Rate Reduction Refinance Loan, commonly called an IRRRL. This type of loan is called the streamline refinance because it offers veteran homeowners the ability to access lower and fixed interest rates on their VA home loans with a quick turn around time.
Essentially the VA created this type of loan to help veteran homeowners secure the best interest rates possible on their home loans, and to do it in a streamlined and quick manner. This type of loan refinance is simple and quick because it does not require an appraisal of the home or income verification. The thought process behind this is that veterans with a VA home loan already underwent the loan process, so the refinance information is already secure. This cuts back on paperwork, hassle and time for both the VA loan refinancing officer and the homeowners.
To qualify for a VA streamlined refinance, you must already have a VA home loan. If you do not have a current VA home loan, we encourage you to take a look at our pages regarding how to receive a VA Home Loan, how to refinance into a VA home loan from a conventional loan or looking into our FHA streamline refinance program.
How a VA Streamlined Refinance Works for You
We briefly touched on how a VA streamlined refinance works above in our discussion on what this type of loan actually is, but it works for homeowners in several ways. If you are a veteran with a less than perfect credit score but still have your VA home loan, the streamlined refinance won’t run your credit again. This means that you can qualify for the lowest available interest rates even if your credit score does not reflect the typical low interest rate eligibility requirements.
Streamlined refinances also help homeowners take advantage of uncommonly low interest rates and lock in those rates quickly. The common VA IRRRL takes approximately a month or less to complete compared to typical refinance which can take months. This means that veterans can take advantage of amazingly low interest rates and lock them in before the rates go back up.
Lastly, this type of refinance may not require any out of pocket expenses for the home owner. This means that veteran homeowners can not only take advantage of good rates and could bypass a poor credit score, but they also can refinance without the worry of trying to afford it.
Why Would You Need a VA IRRRL?
There are two basic reasons why veteran homeowners take advantage of great VA streamline rates. Either they are looking to have lower monthly payments or they want to reduce the number of years on a VA home loan. Current interest rates are too low to pass up so homeowners are applying for a streamlines refinance while the rates are hot. Veterans simply want more of their monthly income to go towards their family and household expenses. Whether lowering your monthly payment or reducing the number of years on a loan, now is a great time to refinance with a VA home loan.
VA Streamline Refinance
It can be difficult to understand how to do a VA streamlined refinance and how it works in your favor but hopefully this guide has helped. If you have further questions or are ready to see what type of interest rates you can get with a streamline refinance, we would be happy to speak with you.