A VA loan is a mortgage for veterans and guaranteed by the government. A VA streamline refinance is a special program that allows veterans to refinance their current VA loan to a lower rate. It is officially known as an Interest Rate Reduction Refinance Loan (IRRRL).
The Interest Rate Reduction Loan allows you to refinance your current mortgage interest rate to a lower rate than you are currently paying. The Streamline loan is extremely popular because it is easy to qualify. Once you have already been approved for your initial VA purchase loan, it is relatively simple to lower your interest rate. In most cases, a loan officer or lender with expertise in VA loans should be able to complete the loan within a month’s time in most cases.
VA refinance closing costs can be rolled into the cost of the loan, allowing veterans to refinance with no out-of-pocket expenses. Sometimes it is also possible for the lender to cover the majority of the cost in exchange for a slightly higher interest rate on your loan.
In order to qualify for the VA IRRRL, you must be current on your mortgage, with no more than one 30 day late in the last 12 months. You cannot get any cash back on your loan and you must lower your monthly payment (unless you are going from an adjustable rate to a fixed rate). You have to live in the house and you have to be refinancing a VA loan. Typically an appraisal is not required, although some lenders may ask for one.