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VA Home Loan Advantages
AKA The VA IRRRL Program
- The VA streamline has less documentation than a full refinance and many times the lender can close faster with less documentation than a full refinance.
- Many banks can do a VA streamline without requiring an appraisal. The VA does not require an appraisal, credit information, or underwriting, but sometimes we may require some or all of these items.
- It is possible to roll all closing costs and fees into the new loan so there are no out-of-pocket costs when doing a VA streamline.
- One rule for the VA streamline is that the new monthly payment must be lower than the previous loan’s monthly payment. One exception to this rule is when you are refinancing an adjustable-rate mortgage or the new loan term is less than the old one.
- Your new interest rate must have a lower interest rate than the previous loan. An exception is if you are refinancing from an adjustable-rate loan.
- A VA funding fee is usually required unless you are rated with more than 10% disability from the VA
- Your monthly mortgage payment may increase if you finance energy-efficient home improvements, finance your closing costs including the funding fees, finance points, or get a higher interest rate if you move to a fixed-rate loan.
- *The VA streamline program does allow you to receive up to $500 cash out at the loan closing.
- You must be current on your existing VA mortgage and not have had more than one 30-day late mortgage payment within the past 12 months.
These are just the highlights of the VA streamline loan. Many people have questions about the VA streamline loan, so here are a few of the more frequently asked questions.
Does the VA set interest rates for VA loans (and the VA streamline program)?
No. The VA does not set or control interest rates for the VA loan programs. Further, the VA is not a lender, so they also do not lend you money. VA approved lenders are the ones who actually lend you the money and the interest rates for VA loans are not set as only one rate for everyone – each lender will have a different interest rate that is set by the market.
Does the VA streamline refinance program require a credit check and/or an appraisal?
The VA itself does not require an appraisal or credit check when doing a VA streamline, but that doesn’t mean that a lender will not require it. Requirements for appraisals and credit checks will vary by lender. Many people hear about the VA streamline program through their current lender and assume that the only way to go through the program is through their current lender. False! With the VA streamline, you can use any VA approved lender – which is why it makes all the sense in the world to shop around for the best deal.
Can I get cash back or cash out?
Generally speaking, no. The program is designed to help VA homeowners lower their rate with the least amount of paperwork possible and not to provide any cashback from the equity in their home. *That said, occasionally there will be an overage when you go through the transaction and sometimes you may receive a small amount of money at closing or shortly after – but the amount shouldn’t be more than $500.
Does the VA streamline program require an appraisal?
Whether or not you will be required to get an appraisal depends on the lender you are working with. Some lenders will require an appraisal, some will not – which is just one of the reasons that you will want to shop around for the best deal possible. If you are in a situation where you owe more than your house is worth, then we will want to do a VA streamline without an appraisal.
Is there a no closing cost option?
All Banks we work with offer a no-out-of-pocket-closing-costs option for the VA streamline. Learn more about the VA streamline no closing costs options here, what the difference is and which one is right for you.