VA IRRRL closing costs You currently have to pay just 0.5% of the loan amount with an IRRRL refinance. Many of these closing costs can be rolled into your loan amount too.
Most VA IRRRL loans require a 0.5% Funding Fee, although some Veterans are exempt from paying the fee if they are disabled. An example of how this works is, if you're paying a 0.5% funding fee on a $200,000 mortgage, your total IRRRL Funding Fee will come out to $1,000.
The VA says the "occupancy requirement for an IRRRL is different from other VA loans. ... VA IRRRL benefits can lead to monthly savings or a fixed-rate loan which can be a good deal for many qualifying veterans and military families. At least it's worth a look.
VA Loan Closing Costs & Fees
Like every mortgage, the VA loan comes with closing costs and related expenses. VA loan closing costs can average anywhere from 3 to 5 percent of the loan amount, but costs can vary significantly depending on where you're buying, the lender you're working with and more.
Current advertised rates: 2.375% (2.656% APR) with 0.500 discount points on a 60-day lock period for a 15-Year Streamline (IRRRL), and 2.750% (2.865% APR) on a 60-day lock period for a 30-Year Streamline (IRRRL).
Is it worth refinancing for 1 percent? Refinancing for a 1 percent lower rate is often worth it. One percent is a significant rate drop, and will generate meaningful monthly savings in most cases. For example, dropping your rate 1 percent — from 3.75% to 2.75% — could save you $250 per month on a $250,000 loan.
However, you may be able to skip the home appraisal, which can save around $500 to $1,000. How long does an IRRRL take? The time it takes to refinance using an IRRRL varies a lot, depending on the borrower and lender. If all goes smoothly, a VA IRRRL might close in under a month — which is faster than most refinances.
Who is eligible for this program?
You can't take cash out of your home – Unlike the VA cash-out refinance, the IRRRL doesn't allow you to receive any cash proceeds during the loan process. This is a major downside if you have a lot of home equity and you want to use it to pay down debt, pay for home improvements or reach another financial goal.
Answer: As many times as it makes sense. When interest rates trend downward, as they have been doing for the past few years, it can make sense for someone to refinance their mortgage multiple times within a relatively short period of time.
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