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a VA loan refinance.

Do you have questions about refinancing your VA home mortgage? Our team of loan professionals can guide you through each step. What Can a Refinance Do for You?

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VA Loan Refinance Options

In evaluating your options for a VA loan refinance, it’s helpful to understand what the VA program offers. Essentially, there are two types of VA refinance loans: the VA streamline refinance loan (IRRRL) and the cash-out loan. A “cash-out” loan doesn’t necessarily require you to take cash out. Let’s examine these refinance programs and how they can work for you.

VA Home Loan Rates - VA Mortgage Rates - VA Refinance Rates

VA Cash-Out Refinancing

As its name implies, a VA cash-out loan can be used to turn your home’s equity into cash. Often, borrowers use the funds to cover credit card debt, a second mortgage, medical bills, college tuition, a home remodel, or high-interest loans.

  • Debt consolidation
  • Medical bills
  • Home improvements
  • College tuition
  • Major purchase
  • Life’s emergencies

What is a VA IRRRL (Streamline Refinance)?

A VA IRRRL is a mortgage refinance option for Veterans with an existing VA loan. The IRRRL allows homeowners to refinance an existing VA loan to a new VA loan with a lower interest rate or convert a VA loan from an adjustable to fixed-rate.

It’s often called a VA streamline because it generally requires less paperwork and is faster than a typical refinance.

Learn More About IRRRL Loans

What are VA IRRRL Rates?

The typical reason many Veterans refinance is to lower their current mortgage’s interest rate. IRRRL rates may vary from home purchase rates.

When refinancing, the difference in rate or terms must be enough to give you a real benefit, such as monthly payment savings or a fixed rate rather than an interest level that adjusts.

Every VA refinance situation is different. Talk through your specific situation with a loan officer who can run the numbers and help you gauge what makes the best financial sense.

Is cash-out allowed with an IRRRL?

An IRRRL is generally a form of refinancing where no cash-out is allowed. However, as much as $6,000 in additional money may be borrowed to cover the cost of energy improvements completed within 90 days before closing. Ask your lender for details.

Can I refinance a 30-year mortgage to a 15-year with an IRRRL?

Refinancing to a 15-year mortgage is entirely possible and very common. The lifetime interest cost of a shorter loan will be less than a 30-year mortgage. However, the monthly payments on a 15-year mortgage can be significantly higher.

Look at both the monthly payments and lifetime interest costs to see if a mortgage with a shorter term makes sense.

Refinancing may result in higher finance charges over the life of the loan.

What are the VA Streamline IRRRL Requirements?

You may be eligible for a VA IRRRL if you financed the property with a VA loan and can certify you live or previously lived in the home.

The IRRRL is not available to Veterans with non-VA loans. Veterans with non-VA loans wishing to refinance to a VA loan can look to the VA cash-out refinance option.

Lenders may also have guidelines and requirements regarding how long you’ve had your current mortgage, how many payments you’ve made and how long it will take to recoup the costs and fees associated with the new loan.

Specific guidelines and policies on credit scores, appraisals, loan-to-value ratio and more can vary by lender.

Another important IRRRL note is that the VA streamline refinance only requires previous occupancy of the home. Unlike VA home purchase loans, you do not need to intend to occupy the property as your primary residence.

VA IRRRL and the VA Funding Fee

The VA funding fee is an upfront fee applied to every purchase and refinance loan. Proceeds from this fee are paid directly to the Department of Veterans Affairs and are used to cover losses on any loans that may go into default.

The good news is the VA funding fee is lower on IRRRLs than for typical VA purchase and cash-out loans. Borrowers who are not exempt pay a 0.5 percent funding fee on their IRRRL. Borrowers can roll the VA funding fee into the loan balance.

Homeowners who receive compensation for a service-connected disability and qualified surviving spouses are exempt from the funding fee.

Keep in mind, refinancing may result in higher finance charges over the life of the loan.

Take the next step and start your VA mortgage refinance today.

If you’re ready to move forward, or just want more information, the first step is to get no-obligation rate quotes.

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