Interesting Facts about VA Streamline Refinance Loan

What Is Does VA Streamline Refinance Loan Mean?

VA streamline refinance loan helps to lower the mortgage rate with less or no out of pocket cost. It is also popularly known as Interest rate reduction refinancing loan (IRRRL). It is easier to get because, here no much documentation is required, as also termed as “VA streamline refinance”. Both lenders and borrowers love IRRRL because it is easy to use and handle as compared to normal VA. It is specifically designed for Veterans by the US Department of the veteran affair.

VA Streamline Refinances Eligibility

· The person who wishes to avail the VA Streamline refinance must have paid the previous payments in a timely manner over the last few years.

· The person must have availed the VA loan previously on the property he/she wants to refinance.

· In order to qualify for VA Streamline, the person who applied must be staying in that home.

· There is a funding fee applied to most purchases. Currently, it is 0.05% of the new loan amount. Forex if someone is paying 0.5% of the funding fee on a $300, 000 mortgage, then IRRRL funding fee will be $1500. Some veterans if they are disabled are exempted from paying this fee.

· One can decrease the loan term with the VA Streamline loan.

· One must not expect to receive any cash from IRRRL.

· The Veteran who is applying for IRRRL must have served the country for 90 days during war and 181 days during peacetime.

Advantages of VA Streamline Refinance

Some of the advantages are listed below:

· To avail of the VA Streamline loan, less documentation is required.

· Appraisal, income or employment verification is also not required. So also, the person's credit score does not matter.

· It also applies to the properties, which does not have any owner.

· Closing costs can be null.

· A person can borrow up to $6000 as cash for energy improvements.

· One can pay off the VA streamline loan with no penalties.

· One can refinance the current VA loan with very low interest.

· The process is faster.

· The VA Streamline refinance can be completed without expenses.

· Underwater homes are also eligible for IRRRL.

· There is no limit on the borrower’s income.

· The borrower does not require to pay any mortgage insurance fee.

People should consider different options before going for what is a VA streamline refinance, because in this one may get lower interest but if someone is expecting any return in the form of cash, then this plan may not work for him. Sometime people should be aware of fraud lenders so that there won’t face any problem in the future. Therefore, in order to opt for VA streamline loan, one consults with some experts.

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