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Refinancing Frequently Asked Questions


1) What is an IRRRL?
2) What are the benefits of using an IRRRL?
3) What are the requirements?
4) Can I use my VA benefits to refinance even if I do not have a VA loan now?
5) What if I have a 2nd Mortgage?
6) Can I take cash out if I have equity in the property?
7) How much will this cost?
8) I received a letter in the mail about a “special” refinance program for veterans. Is this the same program?


1) What is an IRRRL?
IRRRL stands for Interest Rate Reduction Refinancing Loan. You may also see it referred to as a “VA Streamline”. It is used to refinance an existing VA guaranteed loan to reduce the interest rate or to refinance an adjustable rate mortgage (ARM) to a fixed rate.
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2) What are the benefits of using an IRRRL?

Requires NO income verification
NO need to verify assets
Credit scores DO NOT MATTER - only last 12 months mortgage history
Photo ID and evidence of Social Security Number.
Ratios don't matter
Best of all, NO appraisal is needed in MANY cases
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3) What are the requirements?
The loan you are refinancing must have been guaranteed using your VA entitlement. The new loan will re-use the entitlement you originally used. A Certificate of Eligibility is not required. Your lender can verify your previous loan information by using our automated system.

No appraisal or credit underwriting is required by the VA. However, you should be aware that some lenders may require them anyway.

Also, the occupancy requirement is different from other VA loans. When you originally obtained your VA loan, you certified that you occupied or intended to occupy the home. For an IRRRL, you only need to certify that you previously occupied it.
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4) Can I use my VA benefits to refinance even if I do not have a VA loan now?
If you have your VA entitlement benefits but are not currently in a VA mortgage you may want to consider this option. You may refinance upto 90% of your homes value and take Cash Out if desired. There is NO MORTGAGE INSURANCE. Interest Rates are often lower than a Conventional Loan.

Note: It is also possible to have the lender provide a credit to pay for your closing costs. This is called a "No Closing Cost Loan." Typically this is an excellent option as the monthly savings are "true" savings that are not being offset by closing costs. Ask your lender to provide options for both scenarios.

*Veterans entitled to VA compensation for any disability may be exempt from the Funding Fee.

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5) What if I have a 2nd Mortgage?

No loan other than the existing VA loan may be paid from the proceeds of an IRRRL. If you have a 2nd mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage.

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6) Can I take cash out if I have equity in the property?
No, at least not using a Streamline (IRRRL). If you have equity in the property you MAY take out cash upto 90% of the appraised value with a "full doc" VA refinance. For a Streamline Refinance you must not receive more than $250 cash from the loan proceeds. The new loan amount may not exceed the sum of the outstanding balance on the existing VA loan, plus upto 60 days of interest, plus allowable fees and closing costs. You may also add up to $6,000 of energy efficient improvements into the loan. See your lender for details.
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7) How much will this cost?
An IRRRL may be done with “no money out of pocket” by including all costs into the new loan. Some lenders may say that VA requires certain closing costs to be charged and included in the loan. The only cost required by VA is a funding fee* of ½ % of the new loan amount. This may be paid in cash at closing or added to the new loan. In addition to the energy efficient improvements, you may also include up to 2 discount points into the loan.

Note: It is also possible to have the lender provide a credit to pay for your closing costs. This is called a "No Closing Cost Loan." Typically this is an excellent option as the monthly savings are "true" savings that are not being offset by closing costs. Ask your lender to provide options for both scenarios.

*Veterans entitled to VA compensation for any disability may be exempt from the Funding Fee.

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8) I received a letter in the mail about a “special” refinance program for veterans. Is this the same program?
Some lenders may contact you suggesting that they are the only lender with the authority to make IRRRLs. This is not so. Any lender of your choice may process your application for an IRRRL. Some lenders, such as those associated with VetsCanSave.com specialize in serving Veterans with VA mortgages. You do not have to go to the lender you make your payments to now or to the lender from whom you originally obtained you loan.
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