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Posted 01/20/2016

The VA IRRRL Refinance Mortgage For Military Borrowers: Rates & Rules

Using the IRRRL (VA Streamline Refinance) to refinance your home

Military Mortgage Rates Are Down

It's an excellent time to be a U.S. homeowner. Home values are rising nationwide and the housing market has recovered all of the losses it incurred during last decade's downturn.

Furthermore, mortgage rates are sinking.

Defying expert predictions, 30-year mortgage rates are down and low mortgage rates have caused refinance loans to soar.

For homeowners who purchased prior to mid-2014, the market has presented an opportunity to access low rates, lower payments, and a more solid financial future -- especially for homeowners using their VA Benefits as part of the VA Home Loan Guaranty Program.

When was the last time you checked today's VA mortgage rates?

Click to see today's rates (Aug 23rd, 2016)

What Is A VA Loan?

The VA Interest Rate Reduction Refinance Loan (IRRRL) is an exclusive mortgage program available to homeowners with an existing VA home loan.

VA home loans are available via the Department of Veterans Affairs as part of the G.I. Bill and Veterans Benefits.

VA loans are available in all 50 states and are underwritten to looser mortgage guidelines than a conventional loan via Fannie Mae or Freddie Mac; and FHA loans, which are backed by the Federal Housing Administration.

Furthermore, VA loans can be used on a primary residence or a second home; or, on an investment property if the homeowner can prove that the home was once its primary residence.

VA loans require no money down, require no mortgage insurance, and allow borrowers with below-average credit scores to get approved.

In other words, military borrowers can get approved for a 100% mortgage even with a history of credit card debt and late payments.

The Department of Veterans Affairs defines military borrowers, in general, as borrowers who have served 181 days during peacetime, 90 days during wartime, or have spent 6 years in the Reserves or National Guard.

In addition, many surviving spouses of service members killed in the line of duty are VA loan-eligible, as are most all active duty and/or honorably discharged service members.

Click to see today's rates (Aug 23rd, 2016)

The VA IRRRL Waives Verifications

Meanwhile, for homeowners with an existing VA mortgage, the news is even better.

Mortgage rates for VA loans often beat conventional "Freddie Mac" rates by 25 basis points (0.25%) or more, which gives extra appeal to the VA Interest Rate Reduction Refinance Loan (IRRRL).

The IRRRL -- which is pronounced "earl" -- is a special refinance loan available via the Department of Veterans Affairs as part of the VA Loan Guaranty Program.

It waives the typical verifications of a refinance including lender checks of credit, income, and employment.

If you've paid your mortgage on-time for the last 12 months, and your mortgage rate is higher than today's market rate for a VA refinance loan, you'll likely be eligible for the VA IRRRL.

Today's VA mortgage rates are near their lowest in history.

Click to see today's rates (Aug 23rd, 2016)

Refinancing VA Loans Via The IRRRL Program

The VA home loan program is designed to flexible, helping military borrowers to become homeowners and to establish roots within a community.

It's also meant to be sensible.

Military borrowers using their VA mortgage benefits, therefore, get access to a special refinance program called the VA Interest Rate Reduction Refinance Loan (IRRRL). The IRRL is among the simplest, fastest ways to refinance a mortgage, and it requires nearly zero documentation.

Sometimes referred to as "the VA Streamline Refinance", the IRRRL waives the typical documentation required with a refinance and waives the home appraisal, too.

There are only four main criteria in order to be IRRRL-eligible:

  1. Your current mortgage must be a VA loan
  2. You must be on-time with your mortgage for the last 12 months
  3. You may not receive "cash out" as part of the refinance
  4. You must certify that the home is, or was, your primary residence

There is a fifth eligibility standard, too, but it allows for an exception.

As part of the VA Streamline Refinance, your lender must verify that your post-refinance mortgage payment is lower than your current one. Your mortgage payment may not increase via an IRRRL refinance.

However, for homeowners switching from an adjustable-rate mortgage (ARM) to a fixed, rates don't always drop. This is why the VA grants an exception.

If you're refinancing an ARM into a fixed-rate loan, VA guidelines instruct mortgage lenders to ignore the rule requiring your mortgage payment to drop. When you use the VA Streamline Refinance to switch from an ARM to a fixed-rate mortgage, your payment is permitted to rise.

Beyond this, refinancing VA homeowners will find the IRRRL mortgage approval process streamlined and fast.

Lenders have no requirement to perform credit score verifications, income documentation verifications, or employment checks. Home appraisals aren't required, either.

Regardless of what your home is worth, therefore, you can use the IRRRL.

Get Today's Mortgage Rates

The VA IRRRL is among the simplest, fastest ways to refinance your home. If your current home loan is a VA mortgage, then, consider today's mortgage rates and your ability to refinance.

Get today's live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.

Click to see today's rates (Aug 23rd, 2016)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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2016 Conforming, FHA, & VA Loan Limits

Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)