Military VA Loan

VA IRRRL Refinance Loan Explained


The VA IRRRL stands for “Interest Rate Reduction Refinancing Loan.” It’s a program provided by the Federal government that enables veterans and those with VA home loans or mortgages to refinance their homes and receive a lower interest rate. Sometimes referred to as a “VA Streamline Refinance,” the IRRRL program works to make refinancing and saving money on VA mortgages simple and efficient.

IRRRL Savings Requirements

You can start by completing the IRRRL Quote Request Form. Keep in mind, there are a few requirements. First, the IRRRL only works if you currently have a VA mortgage. Those with FHA, conventional, or any other kind of home loan are not eligible to apply for this refinance option. It is reserved for those who have VA benefits. Additionally, those who are interested in this refinance must make sure that they meet the following qualifications:

  • The interest rate must decrease as a result of the refinance. The exception is refinancing an ARM to a fixed loan.
  • The principle and interest payment must decrease, except when refinancing from an ARM to a fixed, into a shorter term, or adding energy efficient improvement costs to the loan.
  • You cannot receive cash back from the IRRRL refinance. If you are interested in receiving cash from your home’s equity, visit our VA Cash-out Refinance Page for information on that option. You are, however, able to finance up to $6,000 for energy efficient upgrades.
  • The original loan must be a VA loan. Those with FHA, conventional, or any other type of loan are not eligible.
  • You must be up-to-date on your current VA loan and not have missed a payment or had more than one 30-day late payment in the last 12 months.

If you meet all of these requirements, you will likely be able to refinance and save money on your mortgage. To speak to a licensed lender who can guide you through the refinance process and help you save money as quickly as possible, contact us here.

Benefits of an IRRRL Refinance

The IRRRL refinance option is considered a “streamline” refinance because its purpose is to efficiently help homeowners save money on their current VA loan payment. The lender can sometimes give you an interest rate that is slightly above market rates, but still lower than your current rate, and pay for your closing costs with the excess loan proceeds. Although this structure depends on the current interest rate environment and your current rate, it is sometimes a good option. Additionally, there is no appraisal or or income documentation required by the VA to qualify for an IRRRL refinance. Some lenders, however, may require more than the VA requires due to company policies. The best way to find out your specific documentation requirements is to contact a mortgage professional. The main benefits of an IRRRL include:

  • Efficient application and qualification process to maximize savings
  • No income documentation or home appraisal required by VA
  • 30 year VA mortgages can be shortened to 15 year loans
  • an adjustable rate mortgages (ARM) can be refinanced into a fixed rate loan

Each lender has their own specific lending rules and regulations, so you may be required to qualify according to their own set standards. It’s a good idea to speak with several different lenders to find out which one can offer you the best rate and closing cost combination. Call [sourcetrak_number route-to=”all-partners”] to speak with a licensed professional.

Finding the Best IRRRL Refinance Option

Any VA approved lender may issue an IRRRL refinance, but each lender has different qualifications and lending limits. So, while all licensed lenders are able to issue you a refinance, you may not qualify with each specific lender.

Additionally, it is a common misconception that you must use your original VA lender in order to get a VA refinance. This is not the case. Any licensed lender is able to issue you a home refinance if you qualify for their program. Additionally, the paperwork involved with a VA IRRRL is less than was required for your original home purchase, making the process extremely quick and simple.

It is suggested that you speak to several lenders before you settle on one to help you refinance, and MilitaryVALoan.com is here to help. Call [sourcetrak_number route-to=”all-partners”] to speak with a licensed lender or let us connect you with one today. He or she will be happy to answer any questions you might have. Start the saving process today.

This information is accurate as of March 2013.

Source: VA Handbook