Effective April 18, 2011!!!!
With interest rates still very low, many homeowners are refinancing their mortgages to get lower finance rates. They face a ton of paperwork and documentation. The process can last a while, need a new appraisal and generally be a pain in the neck. Of special concern is the appraisal as so many home owner’s properties have seen values reduced to a number lower than their mortgage. A 1% reduction can save you $100 to $600 per month with no out-of-pocket expenses.
Fortunately, under the VA Streamline Program, Veteran’s Administration mortgage borrowers can refinance their property without an appraisal. Countless number of veterans and active duty military members are fortunate to take part in the United States Department of Veteran’s Affairs Streamlines Mortgage Financing program. The program is sometimes called IRRRL, an acronym for Interest Rate Reduction Refinancing Loan.
The VA Streamlines is truly an express loan:
No appraisal needed
No income or employment verification required
No credit report required
There is no need for a termite inspection
Loans close quickly
However, even though the Veteran’s Administration backs the loan and doesn’t require any of the above items, you must shop for lenders as some require appraisals and credit reports.
Your existing Veteran’s Administration loan must be paid on time for the past 12 months and current when you apply for refinancing. Additionally, you may only refinance an existing Veteran’s Administration loan with this program.
Veteran’s cannot refinance for a higher amount that the refinanced mortgage, in other words, no cash back to the borrower. The exception to this is the borrower may add up to $6,000 for energy efficiency improvements and add any loan origination costs too. Be careful though, as this will raise your monthly payment than a straight refinancing. In addition, some lenders may want you to look at a 15-year term for the Streamline as it will save you tens of thousands of dollars in interest. But, the monthly payment will be much higher as you are repaying much more principle than if you write a thirty-year repayment plan refinancing. Make sure you can afford the payments as your home is at stake.
The occupancy requirement for a Veteran’s Administration Streamline is different from your original Veteran’s Administration mortgage loan. For the original loan, you had to certify that you would be occupying the home, for an IRRR loan you are only required to certify that at one time you lived at the property.
An additional feature of Veteran Affair Streamline refinancing is that you may skip up to two payments over the life of the loan – they are put at the back-end of your loan.
There is no better-refinancing program available than the VA Streamlines program. With little paperwork, no out of pocket expenses as you can roll closing costs into the loan and the potential to significantly cut your monthly mortgage payment. This is a loan that you should explore at once. It could save you a bundle of money.