The Massachusetts VA Streamline IRRRL Refinance Program helps current veteran home loan borrowers reduce their monthly mortgage payments by lowering their interest rates. Borrowers in Cape Cod seeking to refinance may also be seeking to transition from an adjustable rate mortgage (ARM) to a fixed rate mortgage.
The VA Streamline IRRRL (Interest Rate Reduction Refinance Loan) is a popular refinancing program for eligible VA borrowers due to the streamlined process of qualifying for a new loan, as well as the limited fees or out-of-pocket closing costs.
The streamline option for the VA Home Loan Program in Cape Cod allows the borrower to refinance easily without having to go through a bunch of paperwork which adds to the popularity of this program.
The benefits of the Streamline VA Streamline IRRRL Refinance Program are:
The VA borrower does not have to go through credit qualifications, however your existing mortgage must be current and you must not have had more than one thirty-day late mortgage payment within the past 12 months.
The normal underwriting process may not apply.
According to the program guidelines, you may not need to send in proof of income such as; w2’s, bank statements, and pay stubs, etc. because as long as you are paying your mortgage payment, they are confident that you will keep it up. But please still check with your professional lender or the lending bank as well.
Lenders do not call in with your employer to see if you are currently working there before considering giving you a loan, meaning there may not be verification of income required.
In most cases the VA Streamline Refinance Loan may allow you to arrange your refinance loan with no out-of-pocket expenses.
Based on program guidelines an appraisal is not required.
The streamline option is made to be smooth and quick (usually not longer than a month in processing time) so that you would not have to worry about the spending much of your time worrying about your VA mortgage refinance.
“The Streamline VA home loan may even allow 103.15% financing without PMI (Private Mortgage Insurance) or a 20% second mortgage as well as up to $6,000 energy efficient improvements.”
About VA Streamline IRRRL Refinance Loans
The VA Streamline IRRRL Refinance Program became known back in 1944 through the Servicemen’s Readjustment Act which is also known as the GI Bill of Rights that was signed and added into law by President Franklin D. Roosevelt.
The intentions for this bill was to be able to provide veterans with a federally guaranteed home with no down payment required,in order to ensure that the veterans and their families can achieve the reality of owning a home. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and to the growth of the nation’s economy.
It is much easier to qualify for a VA Interest Rate Reduction Refinance Loan once you have been approved for your initial VA home loan.
Qualifications for a VA Streamline Refinance (IRRRL)
Borrowers seeking to refinance their current VA home loan with the VA IRRRL Program must be current on their existing mortgage and have no more than one 30 day late payment within the last year.
Borrowers seeking the VA IRRRL Program must have a purpose for the refinance, meaning that your refinanced loan must reflect lower monthly mortgage payments than your existing mortgage payment. The only exception to this requirement is if the borrower is looking to transition from an adjustable mortgage rate to a fixed rate.
VA IRRRL borrowers must also be able to declare that they have been occupying the residence as a primary home. This should not be an issue considering the fact that in order to qualify for the initial VA home loan purchase; the owner must also agree to live in the residence as a primary dwelling.
Property Qualifications
The VA Streamline Interest Reduction Rate Refinance Loan is different from the VA Loans when it comes to occupancy requirements. The only thing that they may require from you is that you certify to have previously occupied the property. This is because when you were fist applying for the VA loan, you certified to them that you intended on occupying the home.
*Refinances for VA can be second home or investment property with special circumstances.
In order for your new loan to be the first mortgage you must agree to subordinate that lien. This is if you have a 2nd mortgage. The new lender who will be assisting you through the process of completing the VA Streamline Reduction Rate Refinance Loan should most likely be able to help you out with this step as well.
*According to guidelines the Loan-to-Value (LTV), credit scores/history, verification of Debt-to-Income (DTI), and even asset verifications are usually waived as well for the VA Streamline IRRRL Program.
Non-veterans are not allowed to apply for an IRRRL, however, if a veteran and spouse who co-signed the original loan can still be considered for a VA IRRRL even if the veteran is no longer alive. The spouse, as the co-signer, can apply for the IRRRL even though the spouse isn’t on the new loan.
Why Choose a VA IRRRL Streamline Refinance?
The VA Interest Rate Reduction Loan also allows you the option to finance improvements in order to make your home more energy efficient and may allow up to $6,000 towards it.
The VA IRRRL Program also allows you to refinance your existing mortgage with no closing costs making it even easier to refinance your home into a lower monthly mortgage payment, because you can roll all of your closing costs into a new refinanced loan, you do not have to worry about those closing costs on hand when you go refinance your current VA mortgage.
However, please note that the VA Streamline IRRRL Refinance Program does not allow borrowers to get cash out against the equity of the property.
VA Streamline Frequently Asked Questions
You have probably figured out by now that there are literally hundreds of different scenarios and possible questions associated with the VA Guaranteed Home Loan Program.
The following Frequently Asked Questions will help answer the most common inquiries about getting approved and funding on a VA Streamline Refinance IRRRL.
Q
What kind of loans can I do a VA Streamline on?
You must have had used an eligibility VA loan previously in order to be eligible to apply for a refinance with the VA Streamline IRRRL. The reason for this is so that you can reuse the entitlement that you had for the original VA Loan.
This entitlement may have been used when you obtained your VA loan when you purchased your home, or if you substituted your eligibility for that of the seller. You may take your Certificate of Eligibility to the lender to verify the prior use of your entitlement.
Q
What if I currently have a second mortgage?
In order for your new loan to be the first mortgage you must agree to subordinate that lien. This is if you have a 2nd mortgage.
The new lender who will be assisting you through the process of completing the VA Streamline Reduction Rate Refinance Loan should most likely be able to help you out with this step as well.
Q
What kind of fees does the VA charge?
It is required by law that the VA charges a VA funding fee. The fees are set in place to help fund towards the cost of this benefit, so this would be a type of a contribution of this benefit, this also helps reduce the cost to taxpayers.
It is usually a higher funding fee for second time borrowers who did not have to make a down payment the first time, this fact is based on the veterans having already had a chance to use the benefit before, additionally, they may have had time to save money towards a down payment or have collected equity.
The fees would normally be reduced if either the first or second time borrowers make a downpayment of at least 5%, it may then be reduced to 1.5% for the funding fee. For example if they put down 10% as a down payment it would then drop to 1.25% for the funding fees.
Typically the funding fee on a veteran’s financial situation is minimized due to the possibility of the fee that may be financed in the loan. National Guard and Reservist veterans pay a slightly higher funding fee percentage.
*If the veteran has a service related disability the VA fee may be waived, among other exceptions.
Q
Do I have to reside in the property that I am trying to refinance?
The VA Streamline Interest Rate Reduction Refinance Loan is different from the VA Loans when it comes to occupancy requirements.
The only thing that they may require from you is that you certify to have previously occupied the property. This is because when you were fist applying for the VA loan, you certified to them that you intended on occupying the home.
Q
How much cash can i get out on the VA Streamline IRRRL Program?
You may add up to $6,000 of energy efficiency improvements into the loan. The second VA loan must not go over the sum of an outstanding balance on the first one, including closing costs and any fees that are allowed.
The Streamline VA IRRRL Refinance Program is intended to reduce a current VA monthly mortgage interest rate and is not a “cash-out” refinance loan, but there is possible cash received at the time of closing, and in this case they may require equity, as well as fit into a specific set of guidelines.
Q
What are the rules that a surviving spouse must follow to be eligible?
If the surviving spouse was a co-signer, the spouse is then considered a veteran as well for the purpose of the VA Streamline Interest Rate Reduction Refinance Loan Program.
