IRRRL Refinance Overview
We’re going to talk about the ways you can save money when you open an Interest Rate Reduction Refinance Loan (IRRRL) at Low VA Rates. We’ve broken this down into three different categories so let’s dive in.
1. The Yes’s
First, we’ll go to over the things you need to do to earn those savings when you open an IRRRL.
- Own your home. In order to save, you need to own your property. Make sure you’re the one receiving the benefits. Don’t do this for your neighbor, even if you like them. But if they’re a veteran, have them call us. We can help them too.
- Current VA Mortgage. That means you’ll use your current veterans home loan benefits. This could include purchasing your home or doing a cash-out refinance transaction. You can think about getting better terms to help you save some money. Having a current VA loan is critical because IRRRLs can only be done on existing VA mortgages. If you have an FHA or conventional loan, you can still convert it to a VA loan with a VA cash-out refinance. However, there will be some additional documentation requirements and you might have a higher VA funding fee.
- Set Up an Escrow Account. This is the magical place where part of your mortgage payment is set aside into savings. This will help for when your property taxes are due, or when you need to pay for your homeowner’s insurance. The escrow account is there to keep money aside for future payments.
- VA IRRRL. For veterans, there is a reduced VA funding fee for the IRRRL. The key is that the percentage rate is not the size of a cash-out-refinance. For example, a cash-out-refinance could be a VA funding fee of 3.6%. Or, on a purchase transaction, it would be 2.3%.
A VA funding fee for the IRRRL is only 0.5%. That’s much cheaper than the funding fees for a cash-out-refinance or a purchase transaction. If you’re a disabled veteran of 10% or greater, then you don’t have to pay the VA funding fee. Remember, the VA funding fee is veterans helping veterans and making sure they can continue to get these great benefits.
2. The No’s
Keep in mind that these are good noes. These are to benefit you, as a veteran.
- No loan limits
- No LTV restrictions
- No FICO restrictions
- No need for an appraisal. This means veterans will keep more funds in their own pocket.
- No lender fees. Lender fees are only good for one person, the lender. They don’t benefit the veteran so we here at Low VA Rates want to make sure that there are no lender fees.
So in this case, no’s are really exciting for us.
3. Murphy’s Law: Anything That Can Go Wrong Will Go Wrong
Here at Low VA Rates, we try to mitigate the impact of Murphy’s Law by taking the time to get the proper information from you and avoid problems in the future. These include asking abou things like:
- Auto Pay. Are you set up with auto pay from your previous mortgage company? If so, we need to make sure to get you off it. You’ll have up to two deferred payments on your IRRRL with us, and if you have a payment come out from your previous mortgage company, it will use up one of those deferred payments and that is something we want to make sure to avoid.
- Homeowners Insurance. We want to be cognizant of when this is due and make sure that there is money to take care of it.
- Property Taxes. Depending on which state you live in these could be due annually, semi-annually, or even quarterly. So when you set up an escrow account, we’ll want to make sure that the funds are there for when these payments are due.
Here at Low VA Rates, we want to make sure our veterans are taken care of, and we can help by saving you money. Call us now at 855-223-0705 to get started.