VA Streamline Refinance Loan: VA IRRRL Definition, Benefits, & Requirements

Start the process by reaching out to a VA-approved lender like Griffin Funding. Contact us or fill out an application online, and from there we can help you navigate the VA IRRRL process. 

At Griffin Funding, we always strive to complete the loan qualification process within 30 days. With VA IRRRLs, we can often complete the process much faster.

The primary costs involved with getting a VA IRRRL include: 

• VA funding fee: When you take out a VA IRRRL, you’ll pay a VA funding fee of 0.5% regardless of the loan amount or how many times you’ve used a VA streamline refinance. This is the lowest VA funding fee rate out of all available VA loans. Keep in mind that some individuals are exempt from paying the VA funding fee. Read our post about the VA funding fee to learn more about what it is, how it works, and who’s exempt.
• VA IRRRL closing costs: The closing costs for a VA streamline refinance loan can often amount to 2-3% of your total loan amount when combined with the VA funding fee. This means that if you’re refinancing a $300,000 mortgage, you can expect to pay around $3,000 – $6,000 to cover both closing costs and the VA funding fee. The closing costs and VA funding fee can be rolled on top of the loan so you don’t have to come out of pocket with any money.

While a VA streamline refinance comes with plenty of perks, there are a few drawbacks to keep in mind, especially if you’re not planning to stay in your home long term:

• Fees are often rolled into the loan balance, which means you’ll pay interest on them over time.
• You won’t receive any cash back as this type of refinance doesn’t allow you to tap into your home’s equity.
• It may not make financial sense if you plan to move within a few years, since you might not recoup the closing costs.
• Only available to borrowers with an existing VA loan, so it’s not an option if your current loan isn’t VA-backed.

VA IRRRL rates are typically lower than those for most other refinancing options. That’s one of the biggest perks of using a VA streamline refinance.

Here are some key factors that affect VA IRRRL interest rates:

• Credit score: A higher score usually helps you lock in a better rate.
• Loan term: Shorter terms (like 15 years) often come with lower rates.
• Market conditions: Overall economic trends and interest rate movements can shift daily.
• Lender pricing: Rates can vary slightly from one VA-approved lender to another.
• Loan type: Whether you’re switching from an ARM to a fixed-rate loan can also affect your rate.

Want to get a better idea of your potential monthly payment? Try using a VA loan affordability calculator to see how today’s VA IRRRL rates might work for you.

A VA cash-out refinance lets you take out a new VA-backed mortgage that replaces your current loan and gives you cash from your home’s equity. You can use that money for anything, like paying off debt, making home improvements, or covering other expenses.

This differs from a VA streamline refinance, or VA IRRRL, which is only for lowering your interest rate or switching from an adjustable to a fixed-rate loan. This option doesn’t let you take out cash and usually requires less paperwork.

So, if you’re looking to tap into your home’s value for extra funds, the VA cash-out refinance might be the right move. But if you just want a simpler way to save on your monthly payments, the VA IRRRL program could be a better fit.

The time it takes to get a VA streamline refinance varies depending on your situation and the current backlog of applications. However, Griffin Funding makes it a point to try to complete this process in 30 days or less. In many cases, Griffin Funding can streamline the VA loan timeline and help you close on a VA IRRRL much faster.

In order to get a VA IRRRL, you may need documents such as: 

• Proof that you currently have a VA loan
• Verification that you currently live or have previously lived at the residence
• Confirmation with the Department of Veterans Affairs regarding the original VA home loan
• Review of on-time payment history for the past year through new credit check
• Proof of assets (only required if you’re paying cash for closing costs)

It’s also a good idea to keep your COE on hand, although it’s not technically required to get approved for a VA IRRRL.

One of the upsides of applying for a VA IRRRL is that you won’t need documents such as pay stubs, tax returns, or bank statements to qualify. As you navigate the VA IRRRL application process, make sure to communicate with your lender and provide any requested documentation.

You typically cannot get cash from a VA streamline refinance. The exception to this is that you can get a reimbursement of no more than $6,000 for the cost of energy efficient home upgrades if they’re completed within 90 days before the loan’s closing.

If you want to take advantage of your home’s appreciation and leverage your home equity for cash, then consider applying for a VA cash-out refinance. With a VA cash-out refinance, you can exchange some of the home equity you’ve built up for cash that you can use to consolidate debts, fund home improvement projects, and cover other large expenses.

VA refinance rates vary based on factors such as the lender you work with, market conditions, and your current financial profile. Borrowers who have a strong credit score and a history of making timely mortgage payments will be able to access the best VA IRRRL rates.

At Griffin Funding, we offer highly competitive VA refinance rates for VA IRRRLs and VA cash-out refinance loans. Reach out to us or fill out an application today to lock in your VA IRRRL rate.

You can use a VA IRRRL as many times as you want. With that being said, there are a few barriers that restrict how often you can get a VA streamline refinance. For instance, the VA’s seasoning requirement mandates that 210 days must pass after taking out a VA loan before you can get a VA IRRRL. This means that if you refinance your VA loan, you must wait at least 210 days before you’re able to refinance again.

Additionally, in order to get a VA IRRRL, the VA mandates that there must be a net tangible benefit for the borrower. This essentially means that you must be getting a significantly lower principal and interest payment as a result of refinancing.

Whether a VA IRRRL is worth it depends on your personal circumstances. However, in many cases it can make mortgage payments less of a burden, an indisputable advantage for many homeowners. Typically, VA IRRRLs are most beneficial to military personnel or veterans and their families who plan on making this residence their permanent (or at least long-term) home.

If you are unsure whether a VA IRRRL is the right option for refinancing your home loan, speaking with one of our knowledgeable VA loan specialists can help you evaluate your circumstances and move forward in the right direction.

Like your first VA home loan, your VA IRRRL limit is based on your VA entitlement. In fact, a VA IRRRL reuses the entitlement applied to your first home loan.

In most cases, your new VA loan will be the payoff of your existing VA mortgage plus closing costs, prepaid interest, prepaid taxes and insurance, a new impound account and a 0.5% VA funding fee (if you are not exempt from the VA funding fee due to a service-related injury).

Our free VA streamline loan calculator can help show you how much money you can save every month by getting a VA IRRRL.

You cannot get a VA streamline refinance if your original mortgage isn’t a VA loan. If your original mortgage was not a VA-backed home loan, you still have other options for refinancing. Fortunately, Griffin Funding has a diverse range of mortgage products, with suitable refinancing options for borrowers in most financial situations.

If you want to explore your mortgage refinancing options, consider downloading the Griffin Gold app. With the Griffin Gold app, you can compare mortgage types, monitor your financials and credit score, privately browse homes, get personalized help from Griffin Funding real estate professionals, and much more.