VA Streamline Refinance | Reduce Your Monthly Payment


Dawn Papandrea
Military VA Loan contributor

Interest rates are at historic lows. For anyone who is currently a VA loan borrower — even if you got a great rate in 2014 or 2015 — it could be worth looking into a VA Streamline Refinance to reap the benefits of today’s even lower interest rates.

Though a refinance might seem like a hassle, VA-eligible borrowers can lower their monthly payment with the VA Streamline Refinance (also sometimes called a VA Interest Rate Reduction Refinance Loan (IRRRL)). This loan program removes nearly all of the common pain points that you often hear about traditional home refinance options. In other words, the process is seamless, and it can begin saving you money very quickly.

Click here to check today’s VA Streamline Refinance rates.

VA Mortgage Loan Eligibility

The biggest qualification: You must be a veteran or active-duty service member who is currently a VA loan borrower, and be in good standing with your existing VA loan. That means as long as you don’t have more than one late payment over the past year, you have a good chance of meeting qualification requirements for this loan type.

VA loans are guaranteed by the Department of Veterans Affairs, an assurance that allows your mortgage lender to pass many benefits on to you.

Advantages of VA Streamline Refinance (VA IRRRL)

The VA Streamline Refinance is significantly simpler than any other type of refinance. Take a look at some of the advantages.

No documentation or verification

You already went through the thorough process of applying for a VA home loan in recent years. That paperwork will suffice when you need to start the ball rolling on your VA streamline application. No new banking statements, W2 forms, tax returns, or income verification documents are necessary.

Click here to see if you qualify for a payment reduction refinance.

Closes fast

With less red tape to deal with and limited paperwork shuffling, the VA streamline process tends to move much more quickly than a traditional refinance application process, allowing borrowers to lock in current, historic low rates before they begin creeping back up.

More flexible credit requirements

Many VA loan holders are surprised that they can qualify even with damaged credit. While, officially, the VA streamline doesn’t impose a minimum credit score, most VA lenders do. Expect lenders to require a minimum score between 580 and 620 – much lower scores than it takes to buy a home.

Fewer upfront costs

High closing costs often turn off refinance candidates. When refi costs like appraisal, origination fee and the like are high, a refinance takes a long time to pay for itself. With the IRRRL, many of the traditional refinance fees simply don’t exist, like the $400-$500 appraisal. In addition, VA refinancing programs do not require borrowers to pay escrow fees, loan application processing fees, or brokerage fees – all of which are extras that are piled on to traditional refinance costs. The one fee you will have to pay is the IRRRL funding fee, which is 0.5 percent of the total loan amount (lower than the 2.3 percent you paid on your first VA home loan).

The VA funding fee can even be rolled into the mortgage.

Extra perks

If you’ve been thinking about making an energy-efficient home improvement, the VA streamline allows borrowers to tack an additional $6,000 onto the principal of the new loan that they can then use to perform qualified home upgrades. This could be a great way for homeowners to increase the value of the home and save some energy costs in the long run.

Save with a VA Streamline Refinance today

With the process so simple and minimal out-of-pocket costs minimal, a VA Streamline Refinance can help you save hundreds of dollars on your monthly mortgage payment. Even if your current mortgage interest rate is low, historically low interest rates could mean a lower monthly payment. To get started, work with a VA-approved lender to see if an IRRRL is the right refinance program for you.

Check your eligibility here!