VA Rate Reduction Refinance:

VA has a refinance loan called an IRRRL (Interest Rate Reduction Refinance Loan). If you currently have a VA loan and want to take advantage of a lower rate, this is the loan for you. The advantage of the IRRRL is:

-No appraisal

-No income verification

-Not credit score driven

Because of this, the IRRRL is a lower cost refinance loan. The costs that are involved may be rolled into the loan for a "no out of pocket" loan to you.

Basics of the VA IRRRL:

- You must currently have a VA loan

- The refinance must lower your principal and interest payments or reduce the term of the loan (example: 30 year loan changed to a 15 year loan)

- You must have no late mortgage payments within the last 12 months

- You CANNOT receive any cash back

- You CAN roll up to $6,000 in energy efficiency improvements into the loan IF these improvements have been completed within 90 days immediately preceding the date of the loan closing. We must be able to document the energy efficiency of any of these improvements.

- Any other liens must be subordinated to the VA loan

- Borrower must be up to date on any federal debts

- The maximum loan term is your current loan term plus 10 years. For example, if your current loan is 15 years, the refinance can only be 15 years + 10 years = 25 years.