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Programme

VA Loan Refinance Options

Veterans have two refinance paths: the IRRRL (Interest Rate Reduction Refinance Loan) for a streamlined rate reduction, and the VA Cash-Out Refinance for accessing equity.

Model it — VA refinanceAsk about it

What it is

The VA offers two refinance programs, and they serve different purposes. Using the wrong one adds cost and documentation for no benefit.

The IRRRL is a streamline refinance of an existing VA loan. It generally skips the appraisal and income documentation and carries a 0.50% funding fee. The VA requires a net tangible benefit and requires the fees and closing costs to be recouped through monthly savings within 36 months, which is a real constraint on marginal rate drops.

The VA Cash-Out Refinance is a full refinance. Lenders commonly allow it up to about 90% of home value, and it can also be used to move a conventional or FHA loan into a VA loan. Its funding fee is 2.15% on first use of entitlement and 3.30% on subsequent use, and exempt borrowers pay none.

Who it fits

  • Veterans with an existing VA loan, for the IRRRL
  • Veterans with a non-VA mortgage who want to move into a VA loan
  • Veterans who need to access equity
  • Veterans whose current rate sits above the market

How it runs

  1. 1Choose The ProgramIRRRL for a rate reduction on an existing VA loan; cash-out to access equity or to move a non-VA loan into a VA loan.
  2. 2Confirm EligibilityWe request your Certificate of Eligibility and confirm remaining entitlement.
  3. 3ApplyThe IRRRL is streamlined. The cash-out is a full application with appraisal and income documentation.
  4. 4CloseA refinance on a primary residence includes a three-day right of rescission after signing.

Questions

Is the funding fee required on an IRRRL?

Yes, at 0.50% of the loan amount, which is lower than the purchase or cash-out fee. Borrowers receiving compensation for a service-connected disability, certain Purple Heart recipients, and some surviving spouses are exempt.

Do I have to recoup the costs?

Yes. The VA requires an IRRRL to recoup all fees and closing costs through the monthly savings within 36 months, and it requires a net tangible benefit to the borrower.

Can I refinance a non-VA loan into a VA loan?

Yes, through the VA cash-out program, which can refinance a conventional or FHA loan into a VA loan with or without taking cash out.

Is there a seasoning requirement?

Yes. Generally 210 days must pass from the first payment due date on the existing VA loan, and six monthly payments must have been made, before an IRRRL is eligible.

Ask about the va loan refinance options

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Other programmes

Fixed Rate Mortgage

A predictable rate and payment for the life of the loan.

FHA Home Loan

Government-insured loans with 3.5% down and flexible credit guidelines.

VA Home Loan

$0 down, no monthly mortgage insurance, reusable entitlement.

Rehab Loan

Finance the purchase and renovation of a home in a single mortgage.

USDA Loan

0% down loans for eligible rural and suburban homes.

Jumbo Home Loan

Financing for homes priced above the conforming loan limit.