Understanding the Benefits of VA IRRRL Loans

For veterans and active duty service members, the VA IRRRL (Interest Rate Reduction Refinance Loan) is a great option for refinancing their existing VA loan. This program allows qualifying borrowers to lower their interest rate and monthly mortgage payment, making it an attractive option for those looking to save money on their home loan.

What is a VA IRRRL Loan?

A VA IRRRL loan is a refinancing option for borrowers who already have a VA loan on their home. The goal of the IRRRL program is to reduce the borrower’s interest rate and monthly mortgage payment. This can be achieved by refinancing the existing VA loan into a new loan with a lower interest rate.

One of the key benefits of the VA IRRRL loan is that it does not require a new appraisal or credit check. This streamlined process makes it easier for borrowers to qualify for the loan and can result in a faster closing time. Additionally, there are no out-of-pocket costs for the borrower, as all closing costs can be rolled into the new loan.

Benefits of VA IRRRL Loans

There are several benefits to refinancing with a VA IRRRL loan, including:

Lower Interest Rates

One of the main benefits of the VA IRRRL loan is the potential for a lower interest rate. By refinancing into a new loan with a lower rate, borrowers can save money on their monthly mortgage payments and over the life of the loan.

Reduced Monthly Payments

With a lower interest rate, borrowers can also enjoy reduced monthly mortgage payments. This can free up extra cash each month, allowing borrowers to put that money towards other expenses or savings goals.

No Appraisal or Credit Check Required

Unlike traditional refinancing options, the VA IRRRL loan does not require a new appraisal or credit check. This streamlines the process and makes it easier for borrowers to qualify for the loan. Additionally, there are no income or employment verification requirements.

No Out-of-Pocket Costs

All closing costs for the VA IRRRL loan can be rolled into the new loan, meaning borrowers do not have to pay any out-of-pocket costs at closing. This can save borrowers thousands of dollars in upfront expenses.

How to Qualify for a VA IRRRL Loan

In order to qualify for a VA IRRRL loan, borrowers must meet the following requirements:

• Currently have a VA loan on their home
• Be current on their mortgage payments with no more than one 30-day late payment in the past 12 months
• Have used their VA loan eligibility on the property they are refinancing

Additionally, borrowers must benefit from the refinance in some way, such as lowering their interest rate or monthly payment.

FAQs

Can I take cash out with a VA IRRRL loan?

No, the VA IRRRL loan is designed to reduce the borrower’s interest rate and monthly mortgage payment. Cash-out refinancing is not allowed with this program.

Do I need a new Certificate of Eligibility (COE) for a VA IRRRL loan?

No, borrowers do not need a new COE for a VA IRRRL loan. The lender can verify your eligibility using the information from your existing VA loan.

Can I refinance a non-VA loan into a VA IRRRL loan?

No, the VA IRRRL loan is only for refinancing existing VA loans. If you have a non-VA loan, you would need to explore other refinancing options.

How long does it take to close on a VA IRRRL loan?

Since the VA IRRRL loan does not require a new appraisal or credit check, the closing process is typically faster than with traditional refinancing. On average, borrowers can expect to close on their loan within 30-45 days.

Overall, the VA IRRRL loan offers a number of benefits for veterans and active duty service members looking to refinance their existing VA loan. With lower interest rates, reduced monthly payments, and no out-of-pocket costs, this program can help borrowers save money and achieve their financial goals. If you are interested in exploring your options with a VA IRRRL loan, be sure to contact a qualified lender to discuss your eligibility and potential savings.