VA Loans (Veterans Affairs)

VA Loans

Interest Rate Reduction Refinance Loan (IRRRL)

  • Existing VA Mortgage Required
  • 580 Minimum Credit Score
  • No Income or Appraisal Needed
  • Loan Terms from 10 to 30 Years
  • 0.50% Funding Fee
  • Financed into Loan Amount
  • No Mortgage Insurance
  • No Maximum Loan Amount

Rate and Term or Cash-Out Refinance

  • Up to 100% LTV (Loan-to-Value)
  • 580 Minimum Credit Score
  • Loan Terms from 10 to 30 Years
  • 2.30% Funding Fee (First-Time Use)
  • Financed into Loan Amount
  • 3.60% Funding Fee (After First Use)
  • No Mortgage Insurance
  • No Maximum Loan Amount

VA refinance loans, also known as VA Interest Rate Reduction Refinance Loans (IRRRL) or VA Streamline Refinance loans, are mortgage loans specifically designed for veterans, active-duty military personnel, and eligible surviving spouses who already have an existing VA loan. These loans allow borrowers to refinance their current VA loan into a new loan with more favorable terms or features.

Here are some key points about VA refinance loans:

  1. Streamline Refinance: The VA Streamline Refinance program is the most common type of VA refinance loan. It is designed to streamline the refinance process and typically does not require a new appraisal or extensive documentation. The purpose of the VA IRRRL is to reduce the interest rate or monthly mortgage payments on the existing VA loan.
  2. Cash-Out Refinance: VA loans also offer a Cash-Out Refinance option, allowing borrowers to refinance their existing VA loan and receive cash from the home's equity. The cash received can be used for various purposes, such as home improvements, debt consolidation, or other financial needs.
  3. VA Loan Eligibility: To qualify for a VA refinance loan, borrowers must meet the eligibility requirements for a VA loan. These requirements include being a current or former member of the military with a certain length of service or being an eligible surviving spouse. The specific eligibility criteria can be obtained from the Department of Veterans Affairs (VA).
  4. Credit and Income Requirements: VA refinance loans generally have more lenient credit and income requirements compared to conventional loans. While there is no minimum credit score requirement set by the VA, individual lenders may have their own credit score requirements. Additionally, lenders will assess your ability to afford the new loan payment based on your income and current debts.
  5. Funding Fee: VA refinance loans may be subject to a funding fee, which is a one-time fee paid to the VA. The funding fee amount depends on various factors, including the type of refinance, down payment (if applicable), and whether it's a subsequent use of the VA loan benefit. The funding fee can be rolled into the loan amount or paid upfront.
  6. Closing Costs: Like any mortgage refinance, VA refinance loans involve closing costs. These costs can include lender fees, appraisal fees, title search fees, and other expenses. However, the VA limits the closing costs that can be charged to the borrower, providing some protection.
  7. Documentation: VA Streamline Refinance loans generally require less documentation compared to a standard refinance. However, you will still need to provide certain documents such as proof of income, employment verification, and a Certificate of Eligibility (COE) showing your VA loan eligibility.

It's important to consult with a lender or mortgage professional experienced in VA loans to understand the specific requirements and benefits of a VA refinance loan based on your individual circumstances. They can guide you through the process and help determine if a VA refinance loan is the right option for you.

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