A VA streamline refinance can sound daunting but with the help of experts who know the refinancing and mortgage industries and a little research, homeowners can rest assured that receiving a VA streamline refinance is a simple and useful process. To help in homeowner’s research, we’ve created this guide on everything for a VA streamline refinance.
What is a VA Streamline Refinance?
One of the first and most commonly asked questions is, “What exactly is a VA streamline refinance?” This type of refinancing option is also commonly referred to as an IRRRL, which stands for Interest Rate Reduction Refinance Loan. No matter the name, this VA refinancing program is in place to provide veteran homeowners with the quickest, easiest and most beneficial home mortgage refinancing process available. This goal is achieved by veteran homeowners taking advantage of lower interest rates and lenders having a streamlined process for paperwork, resulting in saved money and time for all included parties.
How does a VA Streamline Refinance Work?
This refinancing option works in juxtaposition with two key elements. The first element is interest rate. Many homeowners will wish to refinance their home mortgages in hopes to catch a lower interest rate resulting in lower monthly payments, more money being paid towards the mortgage’s principal amount and eventually a better reflection on credit scores. A VA streamlined refinance works with lower interest rates to offer homeowners all of these lowered rate benefits in a quick and efficient manner. Through this type of loan refinance, the lowest possible interest rates can be locked in until the homeowner chooses to refinance again.
The second element of a well working VA streamlined refinance is its easy and quick paperwork process. Unlike other refinancing options where a homeowner may need to undergo credit checks, home appraisals, or income verification, a VA streamlined loan does not require these items. These items are not necessary because the lenders and VA believe that a homeowner has already undergone these processes during the original mortgage acquisition, making them a waste of time of all involved parties. This in turn dramatically reduces the amount of necessary time and paperwork traditionally involved in a refinance, thus creating a “streamlined,” quick and easy process.
It is the combination of the ability to take advantage of low interest rates and a streamlined process that make the VA Streamline Refinance program a favorite among many veterans. It is also a favorite among lenders, loan officers and homeowners because a traditional home refinance can take up to several months, whereas this type of refinance is often finished in less than 4 weeks.
Refinancing Qualifications for a Streamlined Loan
A VA streamlined refinance can only be completed if the refinancing request is for a mortgage and property that is currently using veteran VA loan eligibility, in which case the eligibility will transfer over to the refinanced loan. If homeowners are not veterans who are currently accessing their home loan benefits, they are ineligible for a VA streamlined refinance. However, these homeowners can take advantage of refinancing into a VA home loan from a conventional mortgage if they so wish.
The Benefits to Veterans Refinancing with a Streamlined Option
There are several benefits for homeowners looking to use VA streamlined refinancing on their mortgage. Not only can lower interest rates be taken advantage off under a quick time limit, but veterans with less than stellar credit may receive low interest rates without a credit check. Also, this style of refinance is perfect for homeowners on a budget because it could bring in a lower monthly mortgage payments (more money in the homeowners pocket each month) but also does not require any money down during the closing costs.
Everything to Know
This article is just the basic information a veteran homeowner who is looking to receive a streamlined refinance should know. For more information or to answer any questions a refinancer may have, we suggest connecting with a direct lender immediately. This can be done by calling our loan officer line at 1.888.407.0010.