Benefits to Refinancing with a VA Streamline Refinance Loan

VA homeowners seeking to lower monthly mortgage payments and/or looking to switch from an unstable variable interest rate mortgage should benefit from refinancing with the VA streamline refinance program.

The VA streamline refinance program or IRRRL (Interest Rate Reduction Refinancing Loan) is available to current VA loan mortgage holders who are active duty military, veterans, reservists or surviving spouses.

Since interest rates have lowered, now is the perfect time to begin refinancing; and even with less than perfect credit, and no available cash for closing costs, your still eligible!  This is the difference between the VA streamline refinance and conventional mortgage programs; perfect credit is not needed in order to qualify. One can still qualify for a VA streamline refinance loan even with poor credit, if the previous 12 payments of the current VA loan have been made on time.

Key Features of the VA Streamline refinance program:

• No property appraisal needed-in most cases
• No income verification
• No credit check done or minimum FICO score
• VA Streamline Refinance loan program provides the option to roll closing costs into new loan
• Faster processing speed due to less documentation and no credit check (No need to provide previous bank statements or pay stubs)
• Not responsible to pay VA Funding fee-if current VA disability benefit recipient
• No prepayment penalty
• Can include 2 months mortgage payments into VA streamline refinance loan

Because the VA streamline refinance loan is strictly for paying off existing FHA or VA loans, generally you will not receive cash back upon closing, but there are exceptions. If there is an escrow on the existing VA loan, a refund of this balance can be received. Also VA streamline loans allow a reimbursement for cost of qualified energy efficient improvements made to the home within 90 days following the closing of the new loan.

Additional qualifications for a VA Streamline refinance loan will require providing your certificate of eligibility.  No investment properties are allowed for this refinance program. The veteran or surviving spouse must still own the property and certify this is their primary residence.

A VA streamline refinance mortgage can be approved without an appraisal if the loan meets certain conditions. The new VA loan must be lower than the original mortgage amount, the new payment must not be higher than 20% of an increase of the old loan payment amount and the new mortgage term must be the lesser of 30 years or the outstanding term on the old loan amount plus 12 years.

VA streamline refinance loans have a minimum loan amount of $50,000 and maximum of $417,000.  Veterans may also qualify for refinance with the VA streamline program up to a $1,094,625 cap depending on the location and if the existing mortgage closed between the period of January 1, 2009 and December 31, 2011.

Related posts:

1. VA Streamline Refinance or IRRL
2. VA Cash Out Refinance
3. Affordable Refinance Program
4. To Pay or Not to Pay? The VA Loan Funding Fee

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