IRRRL is the acronym for Interest Rate Reduction Refinancing Loan, a Veterans Affairs program that is very popular for former military personnel in San Diego who wish to refinance their homes. The IRRRL loan program is often referred to as a “Streamline” or a “VA-to-VA” refinance loan. Taking advantage of this program and today’s low rates allows for significant savings.
Sierra Pacific Mortgage Company helps San Diego homeowners who want to refinance existing VA loans to new rates and terms. Feel free to learn more about the IRRRL program below, or contact our office by calling 619-894-8943 to speak with us.
How Veterans Can Save Money
The IRRRL program allows a homeowner to refinance an existing VA loan to a new loan that is either at a lower rate than original loan or to a loan at a fixed rate, if the original loan was adjustable rate mortgage (ARM). In the first case, this reduction in interest rate saves the homeowner money by lowering the monthly payment. In the latter case, moving from an adjustable rate to a fixed rate protects the homeowner from any future payment increases due to a rise in interest rates from the very low rates now in effect.
Homeowners can also save money by lowering the length of the loan to a shorter term length (for example form 30 year loan to a 15 year loan), saving money in the total amount paid (principal and interest over the life of the loan).
Costs Associated with IRRRL VA Loans
There is a fixed fee to lenders of one half of one percent (0.5%) of the loan amount, and other closing costs are typically associated with the loan and are paid by the borrower. These total costs may be paid upfront, or rolled into the overall loan amount.
Requirements for VA IRRRL Loans
The IRRRL program has several requirements that must be met, including limits to the loan amount, interest rate differences, and eligibility conditions. These requirements include:
- You must have already used your eligibility for a VA loan on the property you intend to refinance under the IRRRL. It must be a VA to VA refinance, and it will reuse the entitlement you originally used. Having your Certificate of Eligibility may be very useful.
- The new loan interest rate must be lower than the interest rate on the old loan, unless financing an adjustable rate mortgage (ARM) to a fixed rate mortgage.
- The refinanced loan amount can not be more than the outstanding balance on the existing VA loan, plus allowable fees and closing costs (this includes the funding fee and up to 2 discount points).
- Occupancy requirement entails that you must only certify that you previously occupied the home.
We Can Help Refinance Properties in the San Diego Area using the VA IRRRL
Our San Diego office is located in Mission Valley, and our staff has the resources and dedication to help you, as we have helped people for over 25 years as a mortgage company. VA IRRRL is just one of the many types of loans we offer. Don’t hesitate to learn how VA loan programs can help you: email us or call 619-894-8943.