VA Refinancing Loans

To learn some of the basic information about the VA loan program, you can look at our VA mortgage product page. The VA also offers two refinance products to service members, veterans, and eligible surviving spouses, which we want you to know all about.

Interest Rate Reduction Refinance Loan (IRRRL or Streamline Refinance)

If you already have a VA mortgage, the IRRRL gives you a stellar refinance option you can use to accomplish one of two goals:

Lower Your Monthly Payment

You can obtain a new interest rate for your mortgage and lower your monthly payment. If the current rates being offered are lower than your mortgage’s current rate, it may make sense to do a VA refinance.

Get a Fixed Rate Mortgage

If your current VA mortgage has an adjustable rate, you can use the VA’s IRRRL to move into a fixed-rate mortgage. This helps protect you against rising payments in the future due to an increase in your interest rate.

The IRRRL comes chock full of benefits such as allowing you to finance every dime of closing costs into the loan amount, foregoing the appraisal and credit underwriting steps to make it both cheaper and much quicker than a normal refinance, and allowing you to get additional funds to make energy-efficient improvements to your home. 

VA "Cash Out" Refinance Loan

If you already own a home and would like to refinance your current mortgage into a VA loan, you may do so with the VA’s “Cash Out” Refinance Loan. Don’t be confused by the name; it is a typical refinance loan and you do not have to receive any cash at closing. The VA just considers any refinance from non-VA to VA a “cash out” refinance.

Eligibility is determined the same way it is with a VA Purchase Loan, and you may still finance up to 100 percent of the home’s value—a very unique benefit to all VA loans.

Facts About VA Refinance Loans

  • No appraisal or credit underwriting package is required on an IRRRL.
  • An IRRRL may be done with “no money out of pocket” by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.
  • When refinancing from an existing VA ARM loan to a fixed rate loan, the interest rate may increase.
  • No lender is required to give you an IRRRL, however, any VA lender of your choosing may process your application for an IRRRL.
  • You may NOT receive any cash from the loan proceeds, except through obtaining a VA Energy-Efficiency Mortgage, which your loan officer can explain more about to you. 
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