For my military and veteran clients looking at their 2019 budget, I want to make you aware of an opportunity. It’s called the Interest Rate Reduction Refinance Loan, or as the acronym-crazed military would say, the IRRRL. Most lenders call it the VA Streamline Refinance. Whatever you call it, don’t miss this prime opportunity!
Here’s the lowdown:
- You must have used your VA eligibility on a primary residence and made at least 6 monthly payments. The home does not need to still be your primary residence.
- The refi must lower your monthly payment by either reducing the rate by at least 0.5% or moving from an ARM (adjustable rate mortgage) to a fixed rate mortgage.
- You can have no more than one late monthly payment.
- You must be able to recoup the refi costs in 36 months based on the lower payment.
- No cash out.
- The 0.5% VA IRRRL funding fee and required title work may be rolled into the loan. (You may use your previous title closing company for a lower title policy fee.)
- No appraisal.
- No income verification.
- No credit score requirements.
- Underwater homes may be eligible.
The recent volatility in the markets has caused interest rates to drop lower than they were during the summer moving season of 2018. If you closed on a new house in the last year, it could be worth your while to look into this. The best mortgage financing deals will be found through mortgage brokers (wholesalers) and not through the major banks such as USAA, Wells Fargo, Chase, etc. A quick search on this site will show you mortgage brokers in your area without having to divulge your contact information and start a never-ending stream of calls and emails.
If you speak with a lender who is offering terms that work for your situation, you should ask for a loan estimate in writing but without pulling your credit report at this time. If you do not know your current credit score, it is available to view when you login to your account with most major credit cards. Hold off on the hard credit pull until you decide to proceed with the refi and which lender you will use. Once you have a written estimate, it wouldn’t hurt to circle back with your current lender to see if they can match or beat the offer. Most will be willing to try.
If you have questions about the program or the process, schedule a free call with me here. I would be happy to have a short chat that helps you nail down the important questions to ask when looking into this financial decision.
