If you read my last post regarding VA refinancing, you are already aware that there are essentially two main types of refinance loans for veterans. I am wanting to focus on the VA streamline or Interest Rate Reduction Loan (IRRL) for this post.
Why would a veteran want to do a streamline refinance?
The most simple and straight forward answer is because the interest rates being offered now are lower than when the veteran purchased the home or refinanced last. If a veteran had purchased a home in 2004, it is likely the interest rate at that time would have been somewhere between 6.25% to 7.0%. Interest rates offered to veterans at this time are closer to 4.5% to 5%. When I was a loan officer I would be amazed at how many people had no idea how much a small drop in their interest rate could save them. I recall one conversation where I was told, “unless I can drop at least 3% points, then it is not worth refinancing.” Attention please veterans reading this blog; DO NOT make that same mistake. The general rule of thumb is that a 1% decrease in your interest rate will normally be worth your while.
How do you get started with a VA streamline refinance?
The most important thing to do prior to contacting a VA approved mortgage lender or bank, is to prepare yourself for the conversation that will take place once you contact your VA mortgage company or lender of choice. Here is a checklist of information or documentation you should gather, prior to contacting a lender:
Gather this information – Step 1
1. Your current monthly mortgage statement. This could be a statement that you get monthly in the mail or you can print current loan details off the lenders web page.
2. Your Mortgage Note. The mortgage NOTE, will normally be found in the binder or folder of information you received when you closed on your home or last refinance. In large bold letters at the top of this document it will say NOTE: NOTICE THIS LOAN IS NOT ASSUMABLE…..
3. Your home owners insurance information. This could be the Declarations Page or just your agent’s contact info, but you will need to have this information available.
4. Survey of property. If you live in TX, FL or OH you may be required to have a survey.
Contact an approved VA lender or bank – Step 2
It is important to understand that the Department of Veteran’s Affairs (VA) does not lend money. The VA approves or authorizes mortgage companies, that have fulfilled certain criteria, to make loans to veterans. Each approved or authorized VA lender will be given a VA LENDER ID # from the VA. Make sure to ask whoever you decide to use for their VA ID number. The internet is a great way to find approved VA lenders and as you may be aware from reading this blog, we are confident in Low VA Rates and their ability to get you approved for a VA streamline loan.
I look forward to sharing more insights into the VA streamline loan on my next post. Veterans, thanks for your dedicated service!