Home Buyer Financing Options

If you have been getting calls or junk mail referring to the VA IRRRL program, you may be a little hestant on this great offer. This refinance program is a great way to quickly (quick as far as refinance processes go) reduce your VA Loan interest rate and save some money every month. WARNING: There are some refinance companies that may not have the best terms, or are not completely upfront about the terms. So do your homework and find a reputable lender to help explain and get the terms upfront.

Here’s a scenerio from one of Phil Sharp Homes customers: Purchased a home in 2009 with a VA loan. Researched the IRRRL program, then researched banks and lender’s for more info. Found out that there were a lot of “shady deals” with the lending companies that were sending flyers, calling on the phone, etc. The “shady deals” companies had bad reviews, poor ratings with the BBB, tried to get people locked in an ARM loan and wasn’t upfront about fees. After contacting a local, reputable bank, the terms were a VA 30 year fixed at 3.98%. The application was started over the phone, took about 15-20 minutes. Minimal paperwork, they were able to roll the closing costs back into the refinance and take care of everything via phone and email. DISCLAIMER: This was one example of a homeowner taking advantage of this program and who has been very happy with the results, however, calling a reputable lender to discuss the terms and refinance for yourself to determine if this program can work for you as each persons result may vary based on many various factors including bank and VA requirements for each individual.

Here’s Some…

Information from the VA Website http://www.benefits.va.gov/homeloans/irrrl.asp

IRRRL stands for Interest Rate Reduction Refinancing Loan. Also called “Streamline” or a “VA to VA.”  Except when refinancing an existing VA guaranteed adjustable rate mortgage (ARM) to a fixed rate, it must result in a lower interest rate.  When refinancing from an existing VA ARM loan to a fixed rate, the interest rate may increase.

No appraisal or credit underwriting package is required by VA.  You should be aware, however, that lenders may require an appraisal and credit report anyway.

A certificate of eligibility is not required.  Your lender may use our e-mail confirmation procedure for interest rate reduction refinance in lieu of a certificate of eligibility.

An IRRRL may be done 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 enable the lender to pay the costs.  (Remember: The interest rate on the new loan must be lower than the rate on the old loan unless you refinance an ARM to a fixed rate mortgage).

No lender is required to make you an IRRRL, however, any lender of your choice may process your application for an IRRRL.  While it might be the best place to start shopping for an IRRRL, you do not have to go to the lender you make your payments to now or to the lender from whom you originally obtained your VA Loan.