VA IRRL Refinance: No Appraisals Needed To Lower Your Rate

Veterans hoping to refinance their VA home loan, using the VA IRRL program, need not worry about recent market declines.  A VA Interest Rate Reduction loan doesn’t require an appraisal. Re-qualification is not necessary  which reduces the volumes of income and asset documentation normally required to obtain a VA loan approval.  Sometimes referred to as a VA streamlined refinance, a VA IRRL loan is granted to the veteran when:

• at a lower interest rate than the existing VA loan, and
• with lower principal and interest payments than the existing VA loan.

Exceptions are made when the term is being shortened to a fifteen year loan.  If the veteran’s payment is rising less than 20%, the refinance is automatically approved.  Income qualification is only required when the payment rises by more than 20% for the shortened loan term.

Documentation required for a new VA IRRL refinance is:

• A copy of the original note (from when you got the mortgage)
• A copy of your DD-214
• A copy of your mortgage statement (from the existing lender)
• A copy of your homeowner’s insurance policy (unless it’s a condo)

After submitting that documentation, a title policy needs to be ordered and submitted,  along with loan disclosures and an Uniform Residential Loan Application, to the receiving lender.

The VA-approved loan underwriter verifies that the last 12 monthly payments were not delinquent, reviews the title policy,  assures that the new loss payee clause of the homeowner’s policy is in the lender’s name, and approves the VA IRRL refinance.

• No appraisal
• No income verification
• No asset verification

Veterans seeking more information about a VA IRRL refinance can contact me.  We fund VA loans in all 50 states.

November 28, 2008