Yes, You Can Refinance Your VA Home Loan

VA Home Loan Refinance

The ability to refinance your current VA loan is one of the many benefits of the VA loan program.  The VA refinance mortgage loan known as the VA IRRRL (Interest Rate Reduction Refinance Loan) is also commonly known as the VA Streamline Refinance program.  This loan program allows current VA mortgage holders to refinance their existing VA loans so they can obtain a lower interest rate or refinance an existing adjustable rate mortgage (ARM) to a fixed-rate mortgage.

The Facts:

  • No appraisal required
  • Credit underwriting package is not required
  • No “out of pocket” money – An IRRRL may be done with all costs in the new loan or by making the interest rate high enough on the new loan that the lender is able to pay all costs
  • No cash from the loan proceeds can be received by the borrower
  • The interest rate may increase if you refinance from a variable rate to a fixed rate loan
  • Any VA Lender can process your application for an IRRRL

Eligibility:

  • The IRRRL must be used for a loan on a property which you have already used your VA loan eligibility
  • It must be a VA to VA refinance and it will reuse the entitlement you originally used
  • The occupancy requirement for an IRRRL differs from other VA loans, you only have to prove you previously occupied the property
  • A new COE (certificate of eligibility) is not required

Additional Information about VA Refinance

  • 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
  • You may have used your entitlement by receiving a VA loan when you bought your house, or by substituting your eligibility for that of the seller if you assumed the loan
  • The VA doesn’t set a cap on the amount you can borrow but there are limits on the amount of liability that can be assumed by the VA which can affect the amount an institution will lend

The VA Funding Fee is generally paid by all using the VA loan benefit.  This reduces the cost to taxpayers since a VA loan requires no down payment and no monthly mortgage insurance premiums. The funding fee is a percentage of the loan amount and it varies depending on the type of loan, your military category, a first-time or subsequent loan user and if you make a down payment.  The funding fee must be paid at the time of closing, you may pay it in cash or finance it with your loan.  Funding Fees are waived for the following conditions.

  • Veterans receiving VA compensation for a service-related disability
  • Veterans who would be entitled to receive compensation for a service-related disability if not receiving retirement or active duty pay
  • Surviving spouse of a Veteran who died in service or from a service-related disability

The funding fee for second-time users without a down payment is slightly higher and National Guard and Reserve Veterans pay a slightly higher percentage.

TJC Mortgage, Inc. is a Birmingham, Alabama mortgage company that is Veteran owned and operated.  TJC Mortgage, Inc. understands the needs of Veterans and their families.