VA Streamline Refinance: What It Is, How It Works & Do You Qualify

We would all like to wake up one day and have the amount of our mortgage monthly payments at least slightly reduced, am I right? Everyone could use that little extra cash that instead goes to the bank every single month. What if I told you that you could make it happen? The only thing is, instead of dreaming about it and hoping the dream will come true, you’ll have to make it come true yourself.

Here’s what I’m talking about: https://www.va.gov/housing-assistance/home-loans/loan-types/interest-rate-reduction-loan/

That’s how all dreams work, don’t they? You set them and you work for them. It’s not like anything will fall from heaven and right into your lap. History has shown that it is a pretty impossible scenario. So, if you are really willing to fulfill this mortgage reduction goal of yours, you will need to get acquainted with the concept of VA streamline refinance.

What Is It?

An Interest Rate Reduction Refinance Loan (IRRRL) is commonly called a VA streamline refinance, because the whole process of approval is highly simplified. This is a loan for service members and veterans and it is becoming highly popular since the qualification requirements are significantly relaxed. The VA appraisal is not always done and the lender underwriting process is not always necessary.

This makes a lot of things pretty easy, which is probably one of the reasons why it is so popular nowadays. Nobody wants to have to struggle with all the paperwork all over again, or pay certain fees when there is a method that allows you to skip through all those annoying steps and cut right to the chase. When you take the time to learn more about the whole process, you will realize that it is all rather quickly and efficiently done, which is definitely a huge benefit.

Are You Eligible?

Of course, it goes without saying that you wouldn’t want to bother even looking into this option if you aren’t eligible. That’s why I suggest you always check your eligibility before you start getting all excited and increasingly informed about how the whole process is done. I suppose you wouldn’t want to get prepared and start the procedure only to find out that you aren’t qualified to get the IRRRL.

So, what does it take to be qualified? The first requirement is that you already have a VA-backed home loan. It goes without saying that this is a requirement that you cannot go around and I suppose that you wouldn’t even be thinking about an IRRRL if you didn’t know that you already meet this particular criterion. Still, I had to mention it, so that there is no confusion as to what we are dealing with here.

Here’s the second one. If you are planning to use the IRRRL for anything other than to refinance the existing home loan I have mentioned above, then you should give it up immediately. This is also a necessary prerequisite and you definitely won’t be able to use this money for anything else than that. The third requirement is that you are either currently living or you previously lived in the home covered by your existing loan. Giving them your word won’t be enough, so you will have to be able to certify this.

How Does It Work?

After checking the requirements and figuring out that you are eligible, you will probably want to know how the whole VA streamline refinance process works exactly. Think of this simply as of an improvement on your previous loan. Being improved, this new loan will help you finally make that dream of lowering the monthly mortgage payment amount.

With IRRRL, you get either a lower interest rate or a lower payment, or you can get both. Now, if that sounds good to you, here is what you should do in order to achieve the aim. For starters, you will need to find yourself a lender and make sure that you are choosing a great one that doesn’t have enormous fees and is able to get you the best deal. After you give all the information to your lender, let them guide you through the process of closing on the IRRRL. And, finally, enjoy your lower rates!