What is a VA IRRRL?
One of the biggest benefits of serving in the military is the VA loan. If you have an existing VA loan and want to refinance your mortgage – you’re in luck! When you use a VA loan to purchase your home, you’re also eligible for the VA streamline refinance program. The program is also known as the VA IRRRL, which stands for Interest Rate Reduction Refinancing Loan. It’s exclusively for those with VA home loans.
Who is eligible?
To get a VA loan in the first place, you had to be a qualified veteran, reservist, or currently serving on Active Duty. A Certificate of Eligibility that is typically required for a VA loan will not be needed. The next step is to evaluate your own situation to determine if refinancing your mortgage is the right move.
Why should I use the VA IRRRL?
The Streamline Program may help you refinance your VA loan to a lower fixed rate and monthly payments with minimal out-of-pocket costs. Plus, you don’t need to get a new appraisal on your home and there are no VA-required inspections.
If you bought your home before 2008, chances are you had an interest rate of above 6 percent. If you waited to refinance, now is your chance. This could save you money on your monthly mortgage payments.
For example, let’s say you bought a home in July of 2007, for $300,000 at an interest rate of 6.7 percent. You’ve now owned the home for about 10 years, and decide to use the VA IRRRL to refinance. At a rate of 4.17 percent, and when you add in closing costs, your refinanced payment would be approximately $700 less per month. If you know you’ll be in the home long term, you can pocket the money to put toward retirement.
To get an idea of what your new mortgage payment could be, check out this calculator.
The VA IRRRL is a little known benefit, but highly effective if you want to lower your monthly payment by refinancing your VA loan.
Navy Federal Credit Union is federally insured by NCUA. Equal Housing Lender.