VA Refinance Loans

An "Interest Rate Reduction Refinance Loan" (IRRRL) or VA Streamline Refinance allows Veterans to refinance their current mortgage interest rate to a lower rate than they are currently paying. This program is only available to veterans who are refinancing their original VA mortgage in which they utilized their original eligibility.

• Must have existing VA Loan:
• No out-of-pocket costs option
• In most cases, No appraisal needed
• In most cases, no income verification needed
• The VA charges a .50% funding fee to guarantee the IRRRL Loan.
• There is no cash out on an IRRRL loan (but you can on a regular VA refinance).
• The loan being refinanced must be current and have a perfect pay history for the last 12 months.
• 2nd mortgages cannot be included and must be subordinated (ask your Loan officer what this means)
• No assumptions are allowed.

This loan can be done with "no out of pocket money" by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.

If you have VA loan eligibility, you can refinance any existing loan into a VA loan. Even if you own nothing on your home, you can also use this loan.

VA CASH OUT REFINANCE

VA cash out refinances in MN, WI, and SD are allowed up to 100% of the appraised value of the home. *

This is a huge advantage over other loans. For example, FHA loans only allow up to 85%, and conventional loans only allow up to 80% of the homes value. Cash-out refinances on properties owned more than one year prior to the refinance are permitted on owner occupied principal residences only.

A cash-out refinance is when a borrower refinances their current mortgage for more than they owe in order to pull out the built up equity that has accrued in the home.  The amount a home owner can borrower is limited by the value of the property compared to the loan amount (otherwise known as the loan-to-value or LTV).  

The following are basic requirements of a cash out VA refinance loan:

• Applies to currently owner occupied properties only
• 2nd mortgages may be paid off with the cash-out refinance (the second mortgage must be at least 12 months old)
• Loan amounts may not exceed 100% of the appraised value. 
• The borrower must have sufficient entitlement for the loan (not including any existing entitlement that was used for loans to be paid off by the refinance
• There must be a first lien against the property
• If the new loan is to refinance an existing mortgage to buy out an ex-spouse's equity, a divorce decree or settlement agreement must be provided to document the equity awarded to the ex-spouse
• All borrowers must meet standard credit, and underwriting quidelines
• A funding fee will be added to the loan amount at time of closing (there are no refunds for previous funding fees assessed by the VA). Funding fees vary. Call for details.
• Maximum loan term is 30 years plus 32 days

* [Note] Up to 100% of the value means your actual loan amount plus any funding fee may not exceed 100% of the current appraisal, but not to exceed local maximum VA loans limits.