What is a VA Streamline Refinance (IRRRL)?

An IRRRL is the VA's Interest Rate Reduction Refinancing Loan. It is also referred to as a VA Streamline Refinance. With this loan, you refinance your existing VA mortgage into a new VA loan with a lower interest rate. Or if you have an adjustable rate mortgage you can replace it with a fixed rate loan.

Do I have to be eligible for a lower interest rate in order to qualify for a VA IRRRL?

Usually yes, unless you have an adjustable rate mortgage. In order to qualify for an IRRRL, the VA requires that if you already have a fixed rate you should only refinance to a lower rate. But if you have an "ARM," or an adjustable rate mortgage, you can refinance to a fixed rate even if it doesn't lower your interest rate.

Why would the VA allow me to get a higher rate if I have an adjustable rate mortgage right now?

With adjustable rate mortgages you may have an initial lower interest rate than a fixed rate mortgage for the first few years, but after the initial period your interest rate will adjust and you could be paying higher payments than you would with a fixed rate mortgage. The VA recognizes this and wants to encourage stability.

Must I use my current lender to refinance?

No. You can choose from any mortgage lender on the VA approved lender's list. Make sure that you shop around for your VA streamline refinance. By looking at several lenders you will get more offers and you can choose the best loan terms for you and your family. Be careful of lenders that try to deceive you into thinking they are the only lender that can finance a VA streamline refinance. The VA has a long list of approved lenders and you should shop around.

What should I look for in a lender?

There is no shortage of brokers/banks that offer a VA streamline refinance. But there is a wide variety in the quality. You should make sure there are very low lending fees and no origination fees. If you are asked to pay an origination fee, you can do much better looking elsewhere.

Does the VA have any requirements for me to get an IRRRL?

You must be refinancing an existing VA backed loan into a new VA backed loan in order to use this program. You cannot receive any cash at closing. The loan amount can only increase slightly as a result of fees and closing costs being financed into the mortgage. However, with a low cost lender, there should be no trouble making sure there is very little out of pocket costs.

Do I have to go through a credit check and appraisal process again when refinancing?

The VA does not require this, because they have already approved you for the loan when you bought the house. However, lenders usually do require a credit check to make sure there are no new judgments or mortgage delinquencies which could disqualify you from being eligible for a VA streamline refinance.

Do I have to get another Certificate of Eligibility?

Since you already provided this when you bought the property, no additional proof of a Certificate of Eligibility is needed.

How can I refinance if I am using my eligibility already on my current loan?

As long as you are refinancing your VA backed mortgage you can use this program to get more favorable loan terms.

What out-of-pocket expenses will I have when refinancing?

None. VA allows all closing costs of refinancing to be financed into your new mortgage. Your lender may have some fees, but you will need to ask to find out what they expect you to pay out of pocket, if anything.

What fees does the VA charge for a streamline refinance?

The VA only requires a nominal funding fee of the amount of your new loan. There are no other fees involved with the VA.

I am exempt from paying the VA funding fee. Does this apply on an IRRRL?

Yes. As long as you are still classified as 10% disabled or more you should be exempt from any of VA's funding fees.

Can I include the cost of home improvements in my IRRRL?

You are allowed to include up to $6,000 in your refinancing loan for the purpose of energy efficient home improvements. Any other home improvements are not eligible.

Can I take cash out with a VA streamline refinance?

No. An IRRRL from the VA is only for the purposes of receiving a better interest rate on your mortgage loan in order to save you cash over the life of the loan.

What is a VA Cash-Out Refinance Loan?

This is the type of refinance that the VA offers for those veterans who want to take cash out of the equity in their homes. You must be refinancing an existing VA loan in order to use the VA cash-out refinancing program.