Updated January 2018
IRRRL Lenders: What You Want To Know
Each lender will require slightly different things for the IRRRL program – and if you have been turned down by one lender, it doesn’t mean that you can’t participate in the program.
If you have a low credit score, owe more than your house is worth or have other special-needs in your situation, it is important that you speak with multiple lenders to see which one can best help you.
Even if you have great credit and lots of equity in your home, it is still important to speak with multiple lenders because each one will have their own rates and fees – and you might be surprised to see how much you can save just by shopping around a little bit!
Ready to get started? Submit your information below and we will match you with a great VA approved lender who can give you a written rate quote on an IRRRL refinance.
VA streamline refinance loans or better known as interest rate reduction refinancing loans are a great way for veterans with VA home loans to refinance their loans to a lower rate. While looking for an IRRRL make sure you educate yourself on the following when looking for a great VA mortgage lender to do your IRRRL.
Something to be aware of: the VA does not lend you money for a VA loan, they only guarantee your loan in the event of default.
When thinking about the IRRRL program, the first thing to know is that the VA doesn’t actually lend you money, they only insure your loan against loss. The VA has a network of VA approved lenders who have the authority to lend money under the IRRRL program or other VA approved loan programs and then the lender works directly with Veterans to loan them money.
When you originally got your VA loan (if you don’t currently have a VA loan, you aren’t eligible for the IRRRL program), you already worked with a VA approved lender – they helped you get your original VA loan. VA approved lenders come in all sizes – from the big national banks to small mortgage brokers – size doesn’t really matter when it comes to being a VA approved lender.
IRRRL Lenders: Free To Choose
When it comes to participating in the IRRRL program, you are free to work with whatever VA approved lender you choose. Just because you currently make your payment a particular lender doesn’t mean that you have to work with them to do a VA IRRRL – any VA approved lender can help you.
If you like your current lender, you certainly can choose to work with them to do an IRRRL, but you are also free to go outside of your current lender for help.
Get The Best Deal On An IRRRL Refinance
The main two reasons to speak with multiple lenders when considering an IRRRL refinance are: (1) guideline differences, and (2) rate and fee differences.
First, each lender doesn’t have the same guideline overlays when it comes to the IRRRL program. Some lenders will require an appraisal, some won’t. Some lenders will require a minimum credit score, some won’t.
Second, each lender sets their own IRRRL rates and fees – and you might be surprised at how much you can save just by shopping around a little. Getting a written IRRRL quote from multiple VA lenders is easy and is the easiest way to save money on the IRRRL refinance.
VA-Approved Lender FAQ’s
Is It a Requirement To Use The Same Lender For IRRRL As You Did From My Original VA Loan?
No, it is NOT a requirement that you use the same lender that you got from your original VA loan from. Any VA-approved lender can give you an IRRRL loan.
Are All Interest Rates The Same Between IRRRL Lenders?
No interest rates for the VA IRRRL will vary by lender. Because interest rates are not set by the VA, each lender will sent their own rates. Always expect there to be different rates for different lenders at different times.
Interest rates change frequently, so it is important that you shop around to get the best rate and get your rate locked in before you quit shopping for a great VA lender with a great rate.
Do Lenders Require Extra Costs/Fees?
Typically, the only fee the VA usually requires is a funding fee at the rate of 0.5% of the loan amount. The funding fee can be paid in cash or just added with the loan amount.
Lenders who advertise a “No Cost” VA IRRRL loan are not being truthful, either. The fact is that there are closing costs and fees associated with any loan, but some lenders would rather not tell you about them and roll them into the loan where you will be paying interest on them for the next 15 or 30 years. The truth is, you can pay these fees up front and avoid the interest.
If you see a “no-out-of pocket closing costs” advertised – then that is more accurate. There are closing costs involved – but they can be rolled into the loan.
How to Find a VA-Approved Lender
Make sure you shop around and talk to several different lenders. They may vary widely in the terms that they offer. They may also vary in lending requirements, such as income verification. Lenders are not required to check your credit score or get an appraisal of the home, but many of them choose to do so. You can easily check out lenders online and compare them.
Taking advantage of the VA streamline loan or IRRRL to lower your interest rates and monthly payments is a smart move, especially in today’s economy. If you are entitled to these benefits, why not go ahead and get started on an IRRRL Just take a minute to fill out the short form below to get matched with a VA-approved lender.
Start here – submit your information and get matched up with a VA approved lender today!