The Streamline refinance, or Interest Rate Reduction Refinance Loan (IRRRL), is a hugely beneficial type of refinance program for homeowners who already have a VA Loan and would like to refinance to a lower monthly mortgage payment.

This refinance type is relatively easy and can be completed quickly, due to the fact that homeowners are refinancing from one VA Loan product to another. VA IRRRL refinance comes with several advantages over other loan programs mainly a lot less documentation. A benefit to the veteran has to be realized in a VA IRRRL streamline refinance, generally a lower interest rate than the existing VA loan, and a lower monthly principal and interest payment than the existing VA loan.

To avoid out-of-pocket costs, homeowners can choose to roll the closing costs and fees into the balance of the loan and still manage to save on their monthly payments.

There are only a few requirements and stipulations. Primarily, the borrower is not allowed to receive any cash back from the IRRRL and the borrower must also certify that he or she currently or has previously occupied the property.

Common reasons people decide to refinance:

Lower Your Payment – You can refinance your loan so that it has a lower monthly payment. And that extra cash savings can go toward your other financial goals, such as saving for a car, putting money into a retirement account or whatever other objectives you may have.

Lower Your Rate – Your interest payments make up a large portion of your monthly payment, especially in the first ten years. The higher your interest rate, the larger your monthly payment and the more you’ll pay over the life of the loan. When you refinance your mortgage to a lower interest rate, you’ll pay less in interest. When rates drop below your current rate, it may be a great time for you to swoop in and get a lower one. It’s always good to keep track of interest rates so you know when you can save the most money!

Change Your Loan Type – Sometimes we need a change of pace in life. If you’re interested in getting out of your fixed-rate loan, you may be the perfect candidate for an adjustable rate mortgage (ARM), which provides a lower interest rate than a fixed loan. After a period of time, though, this rate adjusts based on market conditions. Converting between adjustable and fixed can be a great way for you to save money while taking advantage of the lower rate during the fixed period. On the other hand, switching to a fixed rate gives you certainty.

Get Rid of Mortgage Insurance – If you have an increase in property value based on a new appraisal, you might refinance in order to remove private mortgage insurance (PMI). Meanwhile, once you reach 20% equity, converting from an FHA loan to a conventional one could help you ditch FHA mortgage insurance payments.

Cash for Repairs and Home Improvements – If the hot water heater went after years of service and the roof needs replacing soon, taking cash out of your home can make more sense than putting these bills on a credit card with a much higher interest rate.

Give Your Savings a Boost – Things like a child going to college or retirement age can sometimes sneak up on us faster than we know. If you find yourself behind the eight ball from a savings standpoint, a cash-out refinance can be a good low-interest way to give your accounts a much-needed infusion of green.

Consolidate Debt – If you have additional debt that has a high interest rate and you have enough equity in your home, you could consolidate that debt into your home loan and pay interest at a much lower rate.

Knowing what you’re trying to accomplish with a mortgage refinance will help you understand if it’s the right option for you.

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If you’re looking to take cash out, you have to be on the title of the property for at least six months if you have a conventional, jumbo or VA loan. If you have an FHA loan, the waiting period on a cash-out refi is one year.

On a rate/term refinance (taking no cash out of your equity), there’s no waiting period.

If you recently moved back into your former investment property, the FHA also requires you to prove you’ve lived there for at least a year. If you haven’t been back for at least a year, you can only do a rate/term refinance, and the maximum loan-to-value ratio (LTV) is 85%. In the case of a refinance, LTV is the ratio of the loan amount compared to the appraised value.

One thing to note is that if you inherited the property, there’s no waiting period necessary unless you had an FHA loan and rented the property out at any time since you inherited it.

What is needed:

• You currently have a VA Loan
• Certificate of Eligibility
• Your existing VA loan is at least 6-months old
• You have not been late on payments on your existing VA Loan in past 6 months OR if you’ve had it longer we can allow one 30 day late in past 12 months

What is not needed:

• No Paystubs
• No W2′ or tax returns
• No bank statements
• No Appraisal is required

No Termite inspection and clearance

Common reasons people decide to refinance:

Lower Your Payment – You can refinance your loan so that it has a lower monthly payment. And that extra cash savings can go toward your other financial goals, such as saving for a car, putting money into a retirement account or whatever other objectives you may have.

Lower Your Rate – Your interest payments make up a large portion of your monthly payment, especially in the first ten years. The higher your interest rate, the larger your monthly payment and the more you’ll pay over the life of the loan. When you refinance your mortgage to a lower interest rate, you’ll pay less in interest. When rates drop below your current rate, it may be a great time for you to swoop in and get a lower one. It’s always good to keep track of interest rates so you know when you can save the most money!

Change Your Loan Type – Sometimes we need a change of pace in life. If you’re interested in getting out of your fixed-rate loan, you may be the perfect candidate for an adjustable rate mortgage (ARM), which provides a lower interest rate than a fixed loan. After a period of time, though, this rate adjusts based on market conditions. Converting between adjustable and fixed can be a great way for you to save money while taking advantage of the lower rate during the fixed period. On the other hand, switching to a fixed rate gives you certainty.

Get Rid of Mortgage Insurance – If you have an increase in property value based on a new appraisal, you might refinance in order to remove private mortgage insurance (PMI). Meanwhile, once you reach 20% equity, converting from an FHA loan to a conventional one could help you ditch FHA mortgage insurance payments.

Cash for Repairs and Home Improvements – If the hot water heater went after years of service and the roof needs replacing soon, taking cash out of your home can make more sense than putting these bills on a credit card with a much higher interest rate.

Give Your Savings a Boost – Things like a child going to college or retirement age can sometimes sneak up on us faster than we know. If you find yourself behind the eight ball from a savings standpoint, a cash-out refinance can be a good low-interest way to give your accounts a much-needed infusion of green.

Consolidate Debt – If you have additional debt that has a high interest rate and you have enough equity in your home, you could consolidate that debt into your home loan and pay interest at a much lower rate.

Knowing what you’re trying to accomplish with a mortgage refinance will help you understand if it’s the right option for you.

If you’re looking to use a new appraisal to prove an increase in your equity that’s based on increased property value, there are special waiting periods involved depending on the type of loan you have.

If you have an FHA, a jumbo or a VA loan and you want a new appraisal to determine a value increase, you have to own the property a year before requesting the appraisal.

On agency loans from Fannie Mae or Freddie Mac, there is no specific timeframe you have to wait. The appraisal just has to be supported by changing market conditions and/or documented improvements made to the property.

Refinancing is the process of replacing an existing mortgage with a new loan. The principal balance of the existing loan is paid in full using the balance of the new loan.

Typically, people refinance their mortgage in order to reduce their monthly payments, lower their interest rate, or change their loan program from an adjustable rate mortgage to a fixed-rate mortgage. Additionally, some people need access to cash in order to fund home renovation projects or paying off various debts, and will leverage the equity in their house to obtain a cash-out refinance.

We’ve compiled guides for each loans type.

Conventional Loans

VA Loans

FHA Loans

Jumbo Loans

Non-QM Loans