Veterans and military personnel have the best financing opportunity in the VA loan refinance options. New VA refinance loans are offered to all veterans with VA mortgage loans at reduced rates. In terms of description, such a refinance option is available for current holders of a VA mortgage, helping them to receive lower interest rates with minimum or no out of pocket costs. Though the loan can only be obtained by veterans or active military personnel who have used their eligibility to VA in the purchase of their initial homes, refinance can easily be accomplished and accords beneficiaries the opportunity to save massively on their mortgage.
VA refinancing streamline program is also called IRRRL (interest-rate reduction refinancing loan) program because it dwells greatly on ensuring that the existing VA mortgage is refinanced into the new VA loan with a big interest rate reduction. Alternatively, those who have adjustable rate mortgage loans can replace them with fixed rate loans. However, it is on the qualifications that many may face some hurdles.
Individuals will only be eligible for VA IRRRL if they are eligible for lower interest rate loans or adjustable rate mortgage loans. IRRRL guidelines stipulate that individuals should either have fixed rate loans that they intend to refinance to lower rates or adjustable rate mortgage (ARM) loans to refinance to fixed rates, if their rates cannot be lowered in order to qualify for VA refinancing loans.
Must your refinance VA lender be your present lender?
Certainly not! There are several VA approved lenders to consider. So it is upon the borrower to shop around thoroughly for the most appropriate VA refinancing provider. By looking through offers provided by many lenders, you will have the opportunity to select the most appropriate loan terms for your situation. Be very cautious with a lender who tries to persuade you into thinking that there are few lenders. The VA approved list of lenders is quite long!
What should you look for in your VA lender?
When running through the long list of VA options, check for low lending fees. You want to take complete advantage of the IRRRL reduced rates and should therefore avoid any high lending fees. You should also consider offers that have no origination fees. Any lender asking you to pay origination fees should be ignored with deserved urgency.
VA does not require going through appraisal process or credit checks again during refinancing. As long as your initial mortgage was approved, you will remain eligible for VA refinancing. However, lenders will still carry out credit checks to be sure that there are no mortgage delinquencies or any new judgments which may exclude you from VA streamline refinance eligibility. Nonetheless, no additional eligibility certificate proofs will be required. You should also understand that there are no further fees charged during a VA, except the nominal funding fees of new loan. Individuals who are 10% disabled or more, are exempted from VA funding fees.
What are the benefits of such refinancing?
Omission of standard underwriting processes ensures that the borrower does not bother with bank statements, job verification, W2s and pay checks. The opportunities to skip two monthly payments and to receive the previous loan escrow account balances from the past lenders are noteworthy advantages. Besides, VA refinance allows individuals to finance energy saving home improvements into the new loan.