There are many different ways to save money on an existing mortgage. Many of the options available are depending on the circumstances of life and one in particular is of benefit to Veterans. An Interest Rate Reduction Refinancing Loan (IRRL) is commonly referred to as a VA streamline loan or refinance. This loan is important for Veterans because it guarantees that the new interest rate on the loan must be lower than the old interest rate on the loan. The only exception to this is when going from a VA guaranteed Adjustable Rate Mortgage (ARM) to a fixed rate. In that instance the rate might not be lower but will save money in the long run since it will be a fixed rate that won’t change over time.
Unlike many other things done with the VA (or Veteran Affairs), different rules apply to a VA Streamline. One benefit is that no appraisal or credit underwriting is required. This doesn’t mean that the lender might not request or expect one to be done anyway though! But it is not required by the VA. There is no need to obtain a certificate of eligibility with this refinancing option either. The lender can just use the e-mail certification for the interest rate reduction process instead of having to go through the steps to get the certificate of eligibility. Another benefit is that no out of pocket money may be required for this refinancing since lenders are able to put all the costs into the new loan or make the interest rate high enough to cover any extra expenses of refinancing. This is of help to many Veterans who may be on a very tight budget with no extra cash to spare. As with any big financial decision, it is advisable to consult with a bunch of different lenders and find the best option to save money on the mortgage refinancing.