1. Interest Rate Reduction:

• The primary goal of the IRRRL is to reduce the interest rate on an existing VA loan. This can result in lower monthly mortgage payments, potentially saving borrowers money over the life of the loan. The VA requires that your interest rate is reduced my a minimum of half a percent.

2. No Appraisal or Credit Underwriting*:

• One of the significant advantages of the IRRRL is that, in most cases, there is no requirement for a new appraisal or credit underwriting. This expedites the refinancing process and simplifies the documentation requirements.

• *The exception to this is if you are removing a borrower due to death or divorce. There may be income requirements to show that remaining borrower can afford the payments on their own.

• *Some VA Lenders DO require an appraisal

3. No Out-of-Pocket Costs:

• Borrowers can include all the costs associated with the IRRRL in the new loan amount, eliminating the need for out-of-pocket expenses at closing.

4. No Cash-Out Option:

• The IRRRL is designed specifically for interest rate reduction and does not allow borrowers to take cash out from the equity in their homes. It's focused on providing financial savings through lower interest rates. The maximum you are allowed to receive back at closing is $500 in all states except Texas which is Zero.

5. Lower Monthly Payments:

• By securing a lower interest rate, borrowers can achieve reduced monthly mortgage payments, improving their overall financial situation.

6. Streamlined Process:

• As the name suggests, the IRRRL process is streamlined and simplified. The documentation requirements are minimal, making it a faster and more efficient option for eligible borrowers. Currently the process is about two to three weeks from start to finish.

7. Flexible Loan Terms:

• The VA technically does allow you shorten your term on the IRRRL program, however due to how the guidelines are written, it makes it more difficult to meet the recoupment requirements.

The VA IRRRL (Streamline) Refinance Process:

1. Verify Eligibility:

   • Confirm your eligibility for the VA IRRRL by meeting the specific requirements, including having an existing VA loan. The main requirement is no late payments on the mortgage.

2. Contact VA-Approved Lender:

   • Reach out to a VA-approved lender to discuss your interest in the IRRRL. Provide information about your existing VA loan.

3. Loan Application:

   • Complete the IRRRL application with your lender, providing minimal documentation, including proof of income and your Certificate of Eligibility (COE).

4. Appraisal and Credit Checks (May Not Be Required):

   • While many IRRRLs do not require a new appraisal or credit underwriting, some lenders may still choose to perform these checks. A credit check will be required to determine your Credit score, ensure there are no late payments on the mortgage, and confirm that there is not an open bankruptcy filed.

5. Loan Approval:

   • Once your application is reviewed and approved, the lender provides details on the new interest rate, monthly payments, and any associated costs.

6. Closing:

   • If you choose to proceed, the lender finalizes the details, and you attend a closing. You may include all the costs in the new loan amount.

7. Enjoy Lower Monthly Payments:

   • After closing, your new, lower-interest-rate loan is in effect, resulting in reduced monthly mortgage payments.

Tips for Success:

• Understand the Terms: Clearly understand the terms of the new loan, including the interest rate, loan term, and any associated costs.

• Work with Experienced Lenders: Choose lenders experienced in VA loans and IRRRL refinancing to ensure a smooth and efficient process.