VA IRRRL requirements
How soon can you do a VA IRRRL? In 2018, the Protecting Veterans from Predatory Lending Act became law. It requires a seasoning period of either 210 days from the date of the first payment or after the sixth monthly payment (whichever's longer) before an existing VA loan can be eligible for an IRRRL.
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.
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.
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.
Current VA IRRRL Rates
| VA Loan Type | Interest Rate | APR |
|---|---|---|
| 30-Year VA IRRRL Streamline | 2.750% | 2.865% |
| 15-Year VA IRRRL Streamline | 2.375% | 2.656% |
| 30-Year VA IRRRL Streamline Jumbo | 2.750% | 2.922% |
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.
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.
Refinancing with the VA Streamline loan can be done as many times as you want. The bigger question is, how many times does it make sense to do so? Refinancing doesn't come free – everyone pays in some shape or form.
Yet No Comments