Veteran Home Loans Interest Rate Reduction Refinancing Loan

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The United States Department of Veterans Affairs (VA) runs a system for its military veterans. It is a government body and its status is at the level of cabinet. It is responsible for administering programs of veterans’ benefits for veterans, their families, and survivors. One of the benefits that we are going to examine here is the Veteran Loans under home loans which is a category under government loans.

Description of this Program

VA – Home Loan guarantees are offered to service members, veterans, reservists and certain qualifying unmarried surviving spouses. This is for the express purpose of refinancing of a VA home loan.

General Program Eligibility

It is imperative that you have an ongoing VA loan. Only then will you be able to utilize the Interest Rate Reduction Refinancing Loan (IRRRL) program. It is not an application for a new loan.

Loan Terms

This is under a flexible & free interest rate.
The maximum tenure of the loan is 360 months.
Payments are to be made monthly.
No more than 2 points can be rolled into this loan in addition to allowable closing costs.
Credit underwriting package is not required.
The interest rate is lower than the rate of interest on the existing old loan.

Application Steps

Get in touch with a lender to discuss eligibility for an IRRRL. He will ensure that you match the basic requirements plus the following :
● The amount of monthly payouts for the new loan must be less than the original loan.
● The interest rate must be less than the original loan.
● If you are refinancing an Adjustable Rate Mortgage, then the rate of interest charged to you can be higher than the interest for the old loan.
● The maximum tenure of this loan is 360 months, or a maximum of 10 years in addition to the tenure of the original loan.

Program Information

It is advisable for all Veterans to compare rates from many lenders, just so that they can identify big differences in the terms. Some lenders may misguide by stating that VA requires certain closing costs to be loaded in the loan. Always remember that the only cost charged by the VA is a simple funding fee of 0.5 percent of the loan amount. Anything exceeding this is suspect of malafide intentions. This amount may be included in the loan amount sanctioned or may be paid separately by cash. The loan amount sanctioned will be disbursed only be cheque or a demand draft. Cash is not accepted.