Only silence is what I hear when I recently asked this question to some of my VA loan customers. Truthfully, I didn’t expect them to know what the IRRRL VA mortgage was? I mean come on, who would know what these letters mean? Mortgage people do, well some mortgage people – those who do VA loans. But for the most part, it is not a well-known term.
For those of you with seats in the stands with the rest of us, IRRRL stands for Interest Rate Reduction Refinancing Loan. The IRRRL is also known as the VA Streamline Refinance. It would be much easier to call it this – the VSR – but I guess that’s not as interesting or as mysterious as the IRRRL. I’m just saying.
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Moving on, the VA Streamline Refinance is perhaps one of the best mortgage programs ever invented. What makes this loan so great is that there are only three real qualification requirements:
You must have a VA mortgage, be current on your mortgage payment, and not been 30 days late on your mortgage payment in the last 12 months.
If you pass these three tests, you’ll be happy to know that in most situations you won’t have to provide much more documentation to get your mortgage like you did when you first qualified. The logic is that if you are currently making your mortgage payments on time, then with a rate reduction (payment decrease) you should still be able to make your mortgage payment so why go through additional qualifications?
What all this really means to qualify for a VA Streamline Refinance – the IRRRL – is that:
- You will need to have a credit score of greater than 660 indicating no late
- mortgage payments in the past 12 months.
- You don’t need a VA-assigned appraisal – you only need a normal conventional
- appraisal – and to make matters better a driveby appraisal will suffice.
- Broadly put, you won’t need paystubs, W2’s, tax returns unless as a result
- of the new loan your mortgage payment with principal and interest goes up
- more than 20%.
- You don’t need to be living on the property any longer.
- You must be an eligible veteran.
- You cannot get cash-out
This is the case for what the VA requires, it is possible however that your VA lender may have some additional requirements that are in addition to what the VA says you need to qualify. These additional requirements will vary
between lenders and precautionary measures taken by the lenders in the wake of the rough mortgage years of 2007-2008.
Oh, and for those of you who want to do some energy efficiency improvements to your home, you can add up to $6,000 in your loan balance to cover these expenses when you do a VA Streamline Refinance.
To get started on this loan program it is always a good idea to check with several lenders. Not all lenders do VA loans so you will have to shop around. And if someone says that they are the only ones who do VA loans – hang up on them and keep looking.
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