For those who are fortunate enough to have VA home loan eligibility, hands-down the VA loan is the best choice among all mortgage programs in today’s marketplace for those wanting a loan program with no money down, competitive interest rates and low closing costs. It simply can’t be beat. The VA home loan was part of the original GI Bill in 1944 that provided additional benefits to soldiers returning from WWII, not only as a “thank you” for their service but to more easily assimilate the soldiers back into civilian life. Those who qualify for a VA loan include veterans, active duty personnel with at least 181 days of service, National Guard and Armed Forces Reserves personnel with at least six years of service and others. Millions have taken advantage of this special home loan program to buy and finance a primary residence. Sometimes though, it makes sense to replace the existing VA loan with a new one. And the VA has made it easy to do so.
VA loans come with an inherent Interest Rate Reduction Refinance Loan option, or IRRRL option. This special refinance loan is a VA loan to VA loan program that requires very little documentation. If you currently have a VA loan, you can certainly recall you provided your fair share of paperwork. In addition to your Certificate of Eligibility, you completed a loan application, provided your most recent pay check stubs covering 30 days, your two most recent W2 forms, bank and investment statements and a host of loan disclosures and acknowledgements.
But now you want to refinance to a lower rate but you might be a bit hesitant due to all the paperwork required. Guess what? The VA IRRRL program requires hardly any documentation at all. With an IRRRL refinance, you can lower your monthly payment or change from an adjustable rate mortgage to a fixed rate loan but this time around there is no need to provide—
• Pay check stubs
• W2 forms
• Bank statements
• No credit check
• No employment verification
• No appraisal
That’s right. None of this is required to close an IRRRL loan to get a lower interest rate or get into a fixed rate VA loan. No income documentation, no credit and no appraisal. The VA figures that as long as you’ve made your payments on time with your current, higher rate it makes perfect sense that you would continue to make your mortgage payments on time with an even lower payment. Not only do you get a lower rate or the stability of a fixed rate loan but the amount of paperwork required is so small compared to what was needed when you first obtained your existing VA mortgage. Not only does the VA make it easy to get a VA loan to buy and finance a home, it’s even easier when you refinance an existing VA mortgage using the IRRRL program.
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