Interest Rate Reduction Refinance Loan | IRRRL Loan | VetsWhatsNext
What is the Interest rate reduction refinance loan?
If you currently have an existing VA-backed home loan and would like to lower your monthly payments, make them more stable, or adjust the terms. The Intrest rate reduction refinances loan allows you to refinance a current loan and receive a new loan with new terms.
Are you eligible for the Intrest rate reduction refinance loan?
All of these must be true. You:
- Already have a VA-backed home loan, and
- Are using the IRRRL to refinance your existing VA-backed home loan, and
- Can certify that you currently live in or used to live in the home covered by the loan
Note: If you have a second mortgage on the home, the holder must agree to make your new VA-backed loan the first mortgage.
To be eligible, the Veteran/Servicemember must have been discharged under conditions other than dishonorable and meet the length of service requirements.
As a requirement for a VA home loan, the Veteran, the Veterans’ spouse, or dependent child must certify occupancy for the property.
What are the loan terms for this program?
Veterans can negotiate the interest rate with the lender on all loan types. A VA funding fee must be paid unless the Veteran is exempt due to receipt of disability compensation. The funding fee can be paid in cash or rolled into the loan. The Veteran, the spouse, or the child of an active-duty Servicemember must certify their intent to occupy the property. VA does not require an appraisal to refinance a loan.
Max Loan Length | 30 years
Interest Rate | Market
Max Loan Amount | Varies
Payment Frequency | Monthly
Prepayment Penalties | None
Max Loan Length | VA funding Fee
How do I get an IRRRL?
Find a lender.
- You’ll go through a private bank, mortgage company, or credit union—not directly through us—to get an IRRRL. Terms and fees may vary, so contact several lenders to check out your options.
- Note: If you have a VA home loan be careful when considering home loan refinance offers. Claims that you can skip payments or get very low-interest rates or other terms that sound too good to be true may be signs of a misleading offer.
- Learn more about the signs of misleading refinance offers
Give your lender any needed information.
- If you have the Certificate of Eligibility (COE) you used to get your original VA-backed home loan, take it to your lender to show the prior use of your entitlement. If you don’t have your original COE, ask your lender to get your COE electronically through the VA Home Loan program portal.
Follow your lender’s process for closing on the IRRRL loan, and pay your closing costs.
- You may need to pay the VA funding fee. This one-time fee helps to lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn’t require down payments or monthly mortgage insurance. Your lender will also charge interest on the loan in addition to closing fees.
- Learn about the VA funding fee and other closing costs
- With an IRRRL, you can include these costs in the new loan so you don’t have to pay upfront. Or, you may be able to make the new loan at an interest rate high enough so your lender can pay the costs.