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Refinancing your loans is a great choice when you want to lower your interest rates. With VA loans, the streamline refinancing program makes the process more efficient and effective. It is also known as the Interest Rate Reduction Refinancing Loan (IRRRL) or VA to VA loan. 


One of the primary benefits of this refinancing program is that it does not entail any out-of-pocket charges and requires minimal paperwork. The process of refinancing a VA loan through this program is faster than other refinancing options such as the VA Cash-Out option or a conventional loan refinance.


There are a few things to keep in mind when looking to refinance a loan. In order to participate in this program, the resulting interest rate following the refinancing process must be lower than it was before. Typically, borrowers will refinance their loans to be paid off in a shorter amount of time, resulting in lower interest payments in total but higher monthly payments. The typical rule of thumb is VA wants to see the homeowner drop their mortgage interest rate by at least .50%. The VA Streamline Refinance Program does entail a funding fee of 0.5%, but for veterans with disabilities or other select individuals, this fee may be waived. This funding fee can be added to the loan amount to avoid any out of pocket costs. 


To qualify and apply for this program, veterans need to have paid on their mortgage for the preceding 6 months on time, owned the home for at least 210 days and have maintained their credit rating close to the level they had at purchase. 


The proceeds of an IRRRL can only be applied to an existing VA loan, and in refinancing this loan, it must be considered a first mortgage for the property even if there is a second mortgage.


For many individuals, refinancing a VA loan can help better manage finances and pay off a mortgage in a more timely fashion. Because the Streamline Refinancing Program is so efficient, it is a great option for veterans looking to lower their interest rates without taking up time or paying unnecessary fees.  It is not uncommon for individuals to drop their monthly payment hundreds of dollars per month; and the great part is they do no need to provide income documents, have an appraisal done and in most cases these can close in just 3 weeks.