IRRRL stands for Interest Rate Reduction Refinancing Loan. Except when refinancing an existing VA guaranteed adjustable rate mortgage (ARM) to a fixed rate, it must result in a lower interest rate. When refinancing from an existing VA ARM loan to a fixed rate, the interest rate may increase.
No appraisal, income, or credit underwriting is required by VA.
A certificate of eligibility is not required. Your lender may use an e-mail confirmation procedure for interest rate reduction refinance in lieu of a certificate of eligibility.
An IRRRL may be done with "no money out of pocket" by including all costs in the new loan. (Remember: The interest rate on the new loan must be lower than the rate on the old loan unless you refinance an ARM to a fixed rate mortgage).
You do not have to go to the lender you make your payments to now or to the lender from whom you originally obtained your VA Loan.
You must NOT receive any cash from the loan proceeds.
An IRRRL can be done only if you have already used your eligibility for a VA loan on the property you intend to refinance. It must be a VA to VA refinance, and it will reuse the entitlement you originally used. You may have used your entitlement by obtaining a VA loan when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the loan.
The occupancy requirement for an IRRRL is different from other VA loans. When you originally got your VA loan, you certified that you occupied or intended to occupy the home. For an IRRRL you need only certify that you previously occupied it.
The loan may not exceed the sum of the outstanding balance on the existing VA loan, plus allowable fees and closing costs, including funding fee (.5% of the loan) and up to 2 discount points.
No loan other than the existing VA loan may be paid from the proceeds of an IRRRL. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage.
If you have any questions or would like to see if you qualify for a streamline refinance, please feel free to contact me.
Bob Lowery
Office: 410-248-1762
Cell: 443-653-1720
bob.lowery@prosperitymortgage.com
Feel Free to visit www.marylandhomeloansonline.com to sign up for rate monitoring or to get pre-approved on line.
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