VA Home Loan Streamline Refinance FAQ

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What Is a VA Streamline?

What exactly is meant by "VA Streamline"? And does it adversely affect an active VA loan?

A "VA Streamline" is another phrase for an interest rate reduction refinance loan (IRRRL). This is a new loan that allows you to refinance your property at a lower interest rate.

An IRRRL may be obtained with no money out of pocket by including all costs in the new loan, or by making the new loan at an interest rate high enough to make it feasible for the lender to pay the costs.

The occupancy requirement for an IRRRL is different from other VA loans. When you originally got your VA loan, you certified that you occupied or intended to occupy the home. For an IRRRL, you need only certify that you previously occupied it.

The streamline loan may not exceed the sum of the outstanding balance on the existing VA loan, plus allowable fees and closing costs, including funding fee and up to two discount points. However, you may also add up to $6,000 of energy efficiency improvements into the loan.

Read More: VA Streamline Refinance

How Can I Verify the Availability of a VA Loan?

I'm in the process of buying a new home and need to validate whether I've used VA before or not. I don't think I have, but would like to confirm.

Your lender should be able to help determine your entitlement usage. If not, you can request a COE by mail by filling out a Request for a Certificate of Eligibility (VA Form 26-1880) and mailing it to the address for your regional loan center. You can find the address on the last page of the form. Mail requests may take longer than requesting a COE through your lender.

Related: Get VA Form 26-1880 to download

Do I Need to Verify My Income for an IRRRL?

I've been looking at interest rates and notice they're lower than my current VA loan rate. I figure it's a good time to refinance my house. But I write off most of my income now because I am self-employed. Will this be a problem if I want to refinance?

No. Verification of income for all borrowers on the VA streamline is not required. That means unlike the original VA loan -- which required paycheck stubs, W-2 forms and tax returns to be provided -- the IRRRL requires no income verification whatsoever.

After a Short Sale, When Can I Do Another Loan?

I did a short sale a year ago and am wondering when I could do another loan.

There is a two-year waiting period from the date of the sale and transfer to the new owner. However, there is no waiting period if you (the borrower) had no late payments on any mortgages or consumer debts within the 12 months preceding the short sale, and you are not taking advantage of declining market conditions.

Read More: VA's Interest Rate Reduction Refinance Loan

Can I Do a Second VA Loan?

Can I do another VA home loan if I already received one, but it is paid off?

Yes, you can take out a second VA home loan. But you will have to request that your eligibility be reinstated. You can request a reinstatement by going to https://vip.vba.va.gov, registering for access and applying for a restoration of your VA home loan entitlement.

Do I Need a New Certificate of Eligibility for an IRRRL?

Will I have to obtain a new COE in order to take advantage of the VA streamline refinance?

No, the VA streamline does not require the borrower to obtain an updated COE.

Do I Need to Use the Same Lender for My VA IRRRL?

I wasn't thrilled with the customer service I received from my lender when I got my original VA loan. Do I have to stick with the same lender to refinance?

No, you don't have to use the same lender as your original loan. The VA recommends you shop around and compare lenders when considering an IRRRL.

Does the VA IRRRL Require an Appraisal?

I'm thinking about refinancing but dread going through a bunch of paperwork. Do I need to have my home appraised again to get an IRRRL?

No. A typical refinance requires that you give your lender all the paperwork showing you can pay the mortgage, multiple years' worth of tax returns, pay stubs, bank statements, a property appraisal and inspection that you have to pay for, etc.

The IRRRL doesn't need any of this paperwork; there are also no appraisals or inspections required so you won't have any of those costs. You won't need a credit check because there is no minimum credit-score requirement, though the lender will check your payment history to make sure you have been paying your existing loan as required.

Is There a VA Funding Fee for the IRRRL?

I know that any loan or refinance comes with certain costs. But do I have to pay another funding fee when refinancing my VA mortgage?

Yes, you'll likely have to pay the VA funding fee when refinancing. The VA's funding fee is applied to almost every VA purchase and refinance loan, with only a few exceptions.

Unless exempt, homeowners who take an IRRRL pay a 0.5% funding fee.

The number of times the VA home loan benefit has been used, and details of the member's service, do not come into play here.

With an IRRRL, the funding fee is the only cost required by the VA. It may be paid in cash or included in the loan.

Read More: IRRRL Facts for Veterans

What Should I Do About Phone Calls and Mail Regarding Streamlining My VA Loan?

I purchased my home last year with a VA loan. I have been getting a lot of phone calls and mail regarding streamlining the VA loan. I am not sure if I should do it.

When you close your loan, it becomes public record that you have a VA-guaranteed loan. Loan companies will target you through mailings to try to get you to refinance. I receive at least two mailings a month that appear to come from the government, but which are from loan companies trying to get me to do a streamline refinance.

When deciding on refinancing, compare your own interest rate to rates available now. If you can shave at least 1% off your rate, it's worth considering.

But there are other factors, including closing costs and how long you plan to own the property.

Get a good-faith estimate from a lender to check your anticipated monthly savings, compared to closing costs. Determine how long your pay-back rate would be. For example, if closing costs are $3,000 for a refinance, but you can save $200 a month, then you will make your money back in 15 months. If you plan to retain the property for that time period or longer, it may make sense to refinance.

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