Refinancing with VA Streamline or IRRRL

Interest rates are lower than they have been in years and veterans are looking to refinance their current VA loans. In banker talk, the IRRRL (Interest Rate Reduction Refinancing Loan), is also known as The Streamline, and it is formulated to take an existing VA loan and refinance with a lower interest rate. One stipulation: The interest rate on the new loan has to be lower than that on the present loan. The interest can be higher if an ARM (adjustable rate mortgage) is being converted to a fixed rate loan.Qualifying for the VA Streamline Loan (IRRRL)Processing a Streamline is pretty easy. The VA does not need to see a minimum credit rating. Nor does it require an appraisal. Closing costs levied on the borrower are restrained by VA guidelines and can be applied onto the new loan. As long as the veteran is current on payments on the existing mortgage, eligibility is easy. Because of these odd financial times, some lenders have cinched up their requirements these last couple of years, so it is wise to check with prospective lenders to nail down the requirements. When a veteran secured the original loan, the veteran needed to show occupancy. With a VA Streamline, the veteran does not need to be in residence.Choose a New Lender for the VA Streamline LoanThe lender currently holding the VA loan does not have to be the lender for the refinance through the Streamline or IRRRL. Veterans are free to choose another lender. It would behoove the borrower to be sure the new lender is qualified to cast a VA loan and will pay attention to the process as one would their very own home loan. This means that emails and telephone calls are returned promptly and efficiently. The same veterans eligibility certification used for the current loan can be applied to the Streamline Loan and online verification is all that is needed.No Cash-Back OptionNo cash out refinance is allowed, the borrower cannot take cash from the arrangement. The lower interest rate will mean significant savings. But, a couple of possibilities exist so that the veteran could wind up with some extra cash in pocket. Any money left in the escrow reserve account for the existing loan will generate a refund. This usually amounts to around $1,000, depending on the balance at closing. Plus, as a result of the refinance, one or two monthly payments may be set aside.Payoff Streamline Loans EarlyMaturity of a Streamline (IRRRL) loan can range from 10-30 years. Some vets who are refinancing from high-interest to low-interest often go for a 15-year loan to get the mortgage off their shoulders sooner. Of course, even with a low interest rate, monthly payments will see some increase going from a 30- to a 15-year loan. But, for many, this potential freedom from a mortgage could be seen as a long-term benefit.No Real Hitches for a Streamline Loan (IRRRL)Second mortgages may present a small problem to some veterans. But they can still get a Streamline Loan (IRRRL) if the holder of the second mortgage will agree to a subordination agreement. Application for a Streamline or IRRRL is a quick and easy process. That is why it is called Streamline. The key to this process is having a lender and a loan specialist that are savvy when it comes to helping veterans with their VA loans, IRRRLs and refinancing.