What is a VA loan refinance?
If you have a VA loan, you may be able to save money or reduce your monthly mortgage payments using the streamline refinance process! VA streamline refinances are also called
Interest Rate Reduction Refinance Loans (IRRRL).
Loan refinances are a great way to take advantage of lower interest rates. VA IRRRLs require less paperwork than conventional refinances and allow veterans who qualify to get better rates, better terms, or switch from adjustable rate to fixed rate mortgages. The IRRRL process is simpler than the application to buy a house with a VA loan.
Borrowers cannot get cash out of the IRRRL program. If you need extra cash for expenses or debt consolidation, consider a VA cash out refinance.
*No lender or third party fees will be charged, however you may be responsible for paying escrows, per diem interest and government recording fees.
How much can you save by refinancing your VA loan?
As the name Interest Rate Reduction Refinance Loan implies, the IRRRL program is designed to help veterans more easily refinance their mortgages to save money on interest and reduce their monthly mortgage payments. The savings you might gain from a refinance should be enough to justify the new funding fee and other closing costs you might be required to pay.
To help you decide if refinancing makes sense, use our VA refinance calculator to estimate how much you might save. Give it a try!
This calculator asks for 4 types of information. It asks for information about your current mortgage in the "Current Loan" section. In the "New Loan" section you can add information about the new mortgage you might be able to get. Research current rates and test out different rates to see the impact to your payment. Remember that the interest rates lenders might offer you are affected by factors like your income and credit score, and may be higher or lower than rates you see advertised. The New Loan section is also the place where you should add the loan fees and closing costs you might be required to pay when you refinance. Make sure to include the funding fee. For the IRRRL program, the funding fee is typically 0.5% of the loan amount.
In the "Home Info" section, add the fair market or current appraised value of the house plus how long you expect to own the home after refinancing. The longer you own the house, the more money you might save. Please include payments for taxes and homeowner’s insurance in the "Taxes & Insurance" section. With this information, the calculator can estimate how much your new monthly mortgage payments might be.
Eligibility requirements for a VA loan refinance
You can only refinance an existing VA loan with a new VA loan using the IRRRL process. There are credit, income, and payment history requirements you will have to meet. You have to certify that you previously lived in the house you are refinancing. However it is not required that the house be your current primary residence with a streamline refinance. The loan amount of your new mortgage cannot be larger than the loan balance of your current VA mortgage.
Already have an existing VA loan (which means you do not need to show proof of veteran status with your COE).
Be current and on time on your loan with no late payments for the past 12 months.+
Refinance to a lower interest rate, move from an Adjustable to Fixed rate or want to reduce your loan term.+
Not need any cash out of your home.+
Certify you have lived in the house as your primary residence.
Freedom Mortgage can quickly verify your information and payment history, and lock in your interest rate and potential savings. We are a leading VA lender in the US and we are proud to offer refinances to qualified veterans and their families.
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