Advantages of a VA Streamline Loan
There are numerous advantages to a Streamline Refinance Loan (IRRRL):
The streamline refinance was designed to be done with little to no out-of-pocket cost for the homeowner, making the entire process as simple as possible for you. If you want to complete the refinance with no out-of-pocket costs at all, the lender can either roll the closing costs into the new loan or you may chose an interest rate that provides a lender credit which the lender will use to pay the closing costs for you! In most cases, people don’t have to bring any cash to the closing of streamline refinance loans.
Since VA loans are backed by the government, lenders can often offer lower rates than they would be able to for a traditional loan. Eligible service members will generally pay a better interest rate with a VA loan than they would have with a conventional mortgage. This is true for the streamline refinance loan, as well. You will continue to enjoy very good interest rates by participating in the VA’s program.
Your new monthly payment with the refinanced loan must be lower than the previous loan’s monthly payment.
Rates for VA loans are not set by the Department of Veterans Affairs, despite popular belief. VA-approved lenders and brokers set their own rates, often on a daily basis. VA loan rates change with the financial market just as rates for conventional mortgages do. There is one important VA rule for streamline refinance interest rates. Your new monthly payment with the refinanced loan must be lower than the previous loan’s monthly payment. One time that this rule does not apply is if you are refinancing an adjustable-rate mortgage into a fixed-rate mortgage. The VA will allow you to refinance with a higher interest rate in such a case, since a higher rate is very likely. The other exception to this rule is if your new loan has a shorter term than your original loan did.
You can apply for a streamline refinance at any time. This is true whether you have a traditional VA loan or a VA adjustable-rate or hybrid loan. It typically makes sense to refinance your existing loan if you will be saving at least half a percentage point on your interest rate (unless you have an adjustable-rate loan). Please note that using the streamline refinance option is not considered subsequent use of your VA loan benefits, so you will not incur a subsequent use fee for refinancing. Nor does a refinance require you to use any additional VA entitlement, since you are still using your original entitlement.
A streamline refinance is one of the easiest loans around. You don’t have to complete a new Certificate of Eligibility—the one you used on the original loan is adequate, eliminating the need for new paperwork and documentation. The VA does not require a new credit check or a new appraisal on your home. Some lenders, including Strive Lending, do require a credit check to make sure that you are as financially stable as you were when you got the original loan. But Strive Lending does not require a new appraisal on your home, saving you both time and money.
Use our Streamline Refinance Calculator to see how much you’ll save!
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