What is a VA IRRRL? Frequently Asked Questions
Heritage Home Loans
Heritage Home Loans Spokane, WA
Published on December 2, 2020

What is a VA IRRRL? Frequently Asked Questions

What is a VA IRRRL?

A VA IRRRL stands for VA Interest Rate Reduction Refinance Loan. It can also be called a VA Streamline Refinance. Below are some of the frequently asked questions.

An IRRRL is an opportunity to lower the interest rate and monthly payment on their current VA Loan. It differs from other refinance loans because of the simplicity of the process . In most cases there are is no appraisal required and very minimal documentation.


What makes them different then a regular VA Refinance?

Compared to a regular refinance the IRRRL is a much more seamless process. The loan requires no appraisal and very limited documentation.

While there are fewer requirements the loan can also create some restrictions. For example, you are required to keep the same loan term you have on your current loan. Meaning if you currently have a 30-year loan, the term on the new loan will have to be a new 30-year term.

How Do I qualify for a VA IRRRL?

If you currently have a VA loan on a home that you live in or have lived in, you are eligible for a VA IRRRL.

There are no income or credit requirements for this particular loan. However, some lenders will add requirements of their own to do the loan.

In terms of completing the loan the biggest hurdle will be making sure the loan meets the thresholds in place for benefits to you as a borrower.

These thresholds include the rate must decrease by .5% or more and the recoupment period must be less than 36 months. The recoupment period is the time it would take you to regain the costs for the loan with the amount of money you are saving each month.

To figure the recoupment period you will divide the loan costs by your monthly principal and interest savings.

How do I get Started on a VA IRRRL?

To get started with the loan you will reach out a lender to see if the loan makes sense for you. They will most likely want to see a copy of your most recent mortgage statement.

You will need to complete a full loan application that can be done online, over the phone or in person with most lenders.

Once you complete the application there will be a few documents the lender needs to collect. The amount will be minimal compared to what you had to do when you originally went through the VA loan process.


Bottom Line

The VA IRRRL is a great way for those with a current VA loan to reduce their monthly mortgage payment without all the hassle of going through the full mortgage process again.

Heritage Home Loans
Heritage Home Loans Spokane, WA
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