For Existing VA Backed Home Loans
If you have an existing VA home loan and you want to reduce your monthly mortgage payments – or make your payments more stable an interest rate reduction refinance loan (IRRRL) may be right for you. Refinancing lets you replace your current loan with a new one under different terms.
Why might I want to get an IRRRL?
Often called a “streamline” refinance, an IRRRL may help you to:
- Lower your monthly mortgage payment by getting you a lower interest rate, or
- Make your monthly payments more stable by moving from a loan with an adjustable or variable interest rate (an interest rate that changes over time) to one that’s fixed (the same interest rate over the life of the loan).
On a no-down-payment loan, you can borrow up to the Fannie Mae/Freddie Mac conforming loan limit in most areas—and more in some high-cost counties. You can borrow more than this amount if you want to make a down payment.
Before you decide to refinance, divide your closing costs by how much you expect to save every month by refinancing to see if it’s worth it. While your lender can advise you on the costs and benefits of the transaction, you’ll want to be sure you understand what you’re getting into.
Am I eligible for an IRRRL?
You may be able to get an IRRRL if you meet all of the requirements listed below.
All of these must be true.
- You already have a VA-backed home loan, and
- You are using the IRRRL to refinance your existing VA-backed home loan, and
- You can certify that you currently live in or used to live in the home covered by the loan
Note: If you have a second mortgage on the home, the holder must agree to make your new VA-backed loan the first mortgage.
How do I get an IRRRL?
Call us to get started or just fill out our online application. If you have the Certificate of Eligibility (COE) you used to get your original VA-backed home loan have it ready to show prior use of your entitlement. If you don’t have your original COE, ask us to get your COE electronically through the VA Home Loan program portal.
You may need to pay a VA funding fee. This one-time fee helps to lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn’t require down payments or monthly mortgage insurance. The lender may charge interest on the loan in addition to minimal closing fees. With an IRRRL, you can include these costs in the new loan so you don’t have to pay up front. Or, you may be able to make the new loan at an interest rate high enough so the lender can pay the costs.