Uncle IRRRL wants to refinance your VA loan



You don't have to have an Uncle IRRRL but you must be a veteran with a current VA-backed home loan. IRRRL is an acronym for Interest Rate Reduction Refinance Loan. To refinance with this program, also called the VA Streamline, the loan must provide a net tangible benefit (NTB) which would be in the financial interest of the Veteran. 

Obtaining a lower interest rate is usually the reason behind refinancing but there needs to be enough difference in the current and the new mortgage to justify the expenses incurred.  Significantly lower payments or a shorter term are examples of acceptable benefit.

The Veteran must currently have a VA-backed home loan to refinance using this program.  The Veteran does not have to currently live in the home as long as it can be certified that he or she did at one time.

In most cases, an appraisal is not necessary and less verifications are required.  A minimum 640 credit score is needed, and borrower must be current on their payments with no 30-day late payments in the previous 12-months.  A two-year employment history is required.

There are expenses associated with the IRRRL but they can be rolled into the loan balance.  The VA funding fee, required on new VA loans for purchases or refinances is lower on the IRRRL at 0.5%.  Disabled Veterans and qualifying surviving spouses refinancing under this program are exempt from the VA funding fee.

This program is not available for a cash-out refinance.  There is a $6,000 exception for additional funds to pay energy improvements completed 90-days prior to closing.  Your lender can provide more information for you.

If you are a Veteran and considering a refinance, ask your mortgage professional about this program.  If you need a recommendation of a trusted mortgage professional who is experienced in VA loans, give me a call at (803) 960-1668 or JamieYoung1964@gmail.com.

Comments

Post a Comment

Popular posts from this blog

What every homeowner should know about their property insurance

Image
Insurance is required on a home by the mortgage company, but homeowners rely on it for peace of mind also.   Unfortunately, people may not take the time to investigate their policy and what it covers until they need to file a claim, which could be too late. While it may not seem like the best use of your time, an in-depth visit with your property insurance agent once a year could be valuable to you if you have losses and could increase your peace of mind. The following are some questions you can ask your insurance agent: What is the insured value of the policy and the replacement cost of your home?   Insured value is the amount that would be paid for a total loss but replacing the home could cost more than that amount. What is the deductible?   Higher deductibles on the first amount of the loss are one way to lower the cost of the premium.   It may sound good when you're having to pay for the policy but feel very different at the time you file a claim. What
Read more

Homeownership Cycle and Inventory

Image
An interesting homeownership cycle begins with a starter home and progresses to larger and smaller homes throughout a person's lifetime.   Within a few years after purchasing their initial home, they might move up to a little larger house.   The reasons could be that they simply want a larger home and can afford it, or their increased family size may be motivating the move. While the children are small, they can probably get by with less space but as they grow and behave more like adults, even though they may not be, the need for more room becomes more pressing.   Depending on the size of the family, this will last some time and then, as they go off to college, enter the work force and find their own living space, the parents may find that they no longer need the larger home.   In the interest of saving money or possibly convenience, they migrate from a larger home to a smaller home until they consider an assisted living facility or possibly, a nursing home.   Another alternati
Read more

Avoid Taxes by Keeping Track of Improvements

Image
Keeping track of capital improvements to your home can help you avoid taxes later down the road when you sell it. Some homeowners don't even consider such a thing because they are aware of the capital gain exclusion of up to $500,000 for married homeowners and $250,000 for single filers.   Possibly, the gain in a past sale didn't exhaust the limit that has remained the same since 1997. Today, homes are much more expensive and appreciation in the past few years has been exceptionally high.   It is now possible and maybe more likely, based on the price of the home, for a homeowner to have gains more than these limits. A $250,000 home in 1997 based on an annual appreciation of 4% would be worth almost $700,000 today.   Capital improvements made to a home raise the basis, or cost, of the home which will affect the gain on the sale. Improvements must add value to your home, prolong its useful life or adapt it to new uses.   Repairs, not considered improvements, are r
Read more