VA IRRRL Loan
Refinancing a home using the VA Interest Rate Reduction and Refinance Loan (IRRRL) lowers interest rates so borrowers can see a decrease in their monthly payments. Veterans are also permitted to shorten their mortgage term so you can pay off your loan sooner. This type of refinance allows Veterans to refinance without an appraisal or credit underwriting. VA IRRRLs are part of a special entitlement program which the VA offers.
The primary requirement to qualify for the VA IRRRL is an on-time mortgage history. The VA requires that all payment in the past year were paid within 30 days of their due date. You also must be employed, collecting disability or retired.
As a VA IRRRL specialist, Oceanside Mortgage can offer several distinct advantages. First, we pay your third party closing costs. This means your loan amount will not increase unnecessarily. Oceanside does not require an appraisal for this program and we do not charge any application or lender fees.
Additionally, when you refinance with Oceanside, we will automatically add you to our IRRRL FastTrack program. With the FastTrack program, we will contact you each time rates drop so you can rest assured that you are always at the lowest possible rate.
Finally, since we are VA IRRRL specialists, we have greatly reduced the time and effort required to complete the process. We will not ask for documentation beyond the VA requirements and will be able to close your loan in as few as two weeks. We have helped hundreds of borrowers take advantage of this program. We have been in business for over 20 years and have an A+ rating with the BBB. We also have hundreds of 5-star reviews on Facebook, Google and Zillow.
Please contact a loan specialist today to prepare a complimentary savings analysis. In 5 minutes or less, we can determine if you qualify for the program and determine how much you are entitled to save.
Who is Oceanside Mortgage Company?
Oceanside Mortgage Company is a direct lender, not a broker, that specializes in VA government mortgages. Since 1996 we have built our reputation by offering low rates and fast, honest processing. All Oceanside Mortgage Loan Representatives must pass a rigorous background and credit check, state licensing tests, and be licensed by the department of banking in your state. We are proud of our A+ rating with the Better Business Bureau and our 5-star ratings on Google and Facebook.
How do I know this program is legitimate?
We get this question a lot! Many borrowers believe this program is too good to be true. We want you to feel very secure and safe when doing business with us.
- We have been in business over 20 years and have specialized in the VA IRRRL since our inception
- Our VA Lender ID number is 559613-00-00. You can verify our credentials with the VA by visiting this link.
- Please review our testimonials on our website.
- We are BBB accredited with an A+ rating.
- We have hundreds of 5-star ratings on Facebook, Google and Zillow.
How long does the process take?
From application to closing, the process takes just a few weeks. Once we are ready for closing your loan officer will contact you to schedule the closing appointment. Our closing agents can meet with you at your home or the location you prefer and can accommodate evening and weekend appointments. You will have the opportunity to review the final numbers prior to your closing appointment.
Can I skip a payment?
Typically, you can skip a payment with the VA IRRRL. In the month between closing and your first payment, you do not have a principal and interest payment due. As part of the process, we will verify your escrow balance, and determine the number of funds required to establish your new escrow account. You are permitted to add your new escrow account to your loan balance so that you can receive an escrow refund. Your loan officer will be able to review this in advance of closing with you.
Will I be able to refinance again?
There is no prepayment penalty on a VA loan. The VA IRRRL is designed so that you can take advantage of improving market conditions as many times as it makes sense to do so. Once you’re with Oceanside, we monitor the interest rates and if we can lower your payment again, we will reach out to let you know. You can take advantage of the VA IRRRL every six months.
Are you BBB accredited?
We are BBB accredited! We have met all of BBB’s standards of trust and are proud of our A+ rating. BBB accreditation indicates many things, but above all, it indicates proper practices of honesty, clarity, and privacy within the company and its relationships with customers.
What is a VA IRRRL?
A VA IRRRL is a refinance option that allows the underwriters to reuse much of the information from the original loan. Most loan types have a similar option; the VA loan program’s option is called the Interest Rate Reduction Refinance Loan, or IRRRL for short. Only an existing VA loan can be refinanced with the VA IRRRL option. Oceanside Mortgage Company offers the IRRRL with No Closing Costs, No Appraisal Fee and No Lender Fees. An IRRRL refinance is a great option for existing VA borrowers looking to take advantage of lower interest rates.
Can I use a VA IRRRL to borrow money to pay bills?
The IRRRL refinance is designed to maintain the equity you have in your home and therefore you can’t receive any cash-out. For most VA borrowers, you will not need to make your next mortgage payment. We recommend that you use the interim month to catch up on other bills or put a little extra money into your savings. Since you are not taking additional funds out, the VA does not require that we verify your income or your property value keeping the process simple. We also have the option to refund your escrow balance which can put a large chunk of change back in your pocket.
Can I Add Borrowers with an VA IRRRL?
Yes, borrowers may be added to the title and Mortgage on a non-credit qualifying VA IRRRL, assuming they are married to the Veteran or are also a Veteran.
Do I have to go back to a 30-year loan?
At Oceanside Mortgage, we can customize your mortgage to meet your specific needs. We offer custom terms and may be able to eliminate years of payments or keep you right on pace with your current payoff schedule while putting money back in your pocket each month. We can set your mortgage to the exact number of months of your choosing. Your loan officer will be able to review the various loan terms that you qualify for to help you make your decision.
How do I know if I qualify?
You did the hard work when you purchased your home. For a VA IRRRL, there is no appraisal or income verification required. To qualify you need a credit score above 580 and need to have been making your mortgage payments on time.
How Much Income Do I Need?
The VA IRRRL does not require proof of income like W2s or tax returns. Most other types of loan require the lender must determine the borrower’s ability to afford the new monthly payments. The VA IRRRL eliminates this requirement. If you are employed, collecting disability or are retired, you should qualify for the IRRRL.
Will I Need an Appraisal? What If I Am “Underwater?”
VA IRRRL loans do not require an appraisal. This saves the borrower $450-$550 or more. Oceanside Mortgage uses the original purchase price of the home as the current value. This guideline helps homeowners whose home has lost value. Even homes that are “underwater” – having negative equity – are eligible.
What is the Funding Fee and Do I have to Pay it in Cash?
The Funding Fee is the fee that the VA charges on just about every VA loan to defray the costs of the program. For a VA IRRRL, the fee is 0.5%, unless you are a disabled Veteran. If you are disabled, the fee is 0%. You can wrap this fee into the new loan and do not have to pay it out of pocket. If you wish, you have the option to pay it out of pocket, which reduces your loan amount. Most VA borrowers finance it into the new loan.
Can I shorten my mortgage term?
The VA permits you to shorten your mortgage term if your payment does not increase by more than $50. If your payment increases by more than $50, you would need to provide income documentation to ensure you will be able to pay the increased payment amount. At Oceanside Mortgage, we offer custom loan terms from 15 to 30 years. A loan officer can determine the minimum loan term you qualify for.
Do I have to live in my home to do a VA IRRRL?
No. Many lenders may shy away from a non-owner-occupied VA IRRRL but we will gladly assist you.
How many payments must I make before I can do an IRRRL?
While there is technically no rule or seasoning requirement on a VA IRRRL, we require that you have made at least 6 payments prior to taking advantage of the VA IRRRL. Ginnie Mae and the Department of Veteran’s affairs have indicated that it may not be in your best interest to refinance your mortgage loan if you have made less than 6 payments. Refinancing your loan very rapidly or multiple times with little or no benefit to you is called “churning”. We have been advocating that the VA pass a rule that prohibits lenders from churning your loan. The VA has been considering passing a rule for quite some time. If you contact a mortgage company that suggests you refinance after only a few months, we recommend carefully review the loan presented to determine if it is really in your best interest.
Will my taxes/insurance be included after the VA IRRRL?
Yes, VA requires that you have an impound or escrow account for your taxes and insurance. This account will relieve you from the burden of having to write large checks to your tax authority and insurance company.
What is the VA funding fee for?
VA loans do not have any down payment required and most have very little to no equity at the onset of the loan. On conventional loans, mortgage insurance is required if you put less than 20% down and on all FHA loans there is an upfront MIP (mortgage insurance premium) and a monthly MI (mortgage insurance) due. The Department of Veterans Affairs charges a one-time upfront fee to guarantee the loan. Essentially the VA is charging this funding fee on a VA loan to have funds available should they need to step in and assist the lender in cases where the Veteran is in loan default. The VA funding fee is like an insurance policy for the loan. Banks are willing to make VA loans since they have the backing or guarantee of the US government. If you are collecting some form of VA disability benefits, the VA will waive the funding fee. The VA funding fee is paid one time at the closing of the loan and not every month. This is a huge benefit as compared to the monthly insurance payments required by the FHA, Fannie Mae and Freddie Mac.
Are you part of the VA?
We are not. We are an approved VA lender who is authorized and approved by the Department of Veterans Affairs to originate VA home loans. We do not represent the VA. Our VA lender ID is 559613-00-00. The VA does not originate loans or lend money to purchase homes. The VA guarantees a portion of your loan to the lender to help mitigate the risk the lender assumes when originating your loan.
What documentation is required for the IRRRL?
- Social Security Card or W2
- Copy of Current Note
- Homeowners Insurance Declarations Page or Agent Contact Information
- Recent Mortgage Statement
What is the VA IRRRL Minimum Credit Score?
VA does not have a minimum credit score requirement since it does not require a credit report for the VA IRRRL. At Oceanside, we understand that life happens and not every borrower will have a perfect credit score. We will review your scenario to determine if we can approve your loan no matter what credit score you currently have.
Can I Have Any Late Mortgage Payments?
Oceanside Mortgage will examine recent payment history on the existing VA loan. The VA requires that you must be current on your loan. Oceanside typically requires that you have no 30-day late payments in the last 12 months. If you were just days or a couple weeks late on a payment, it most likely did not show up as a late payment on your credit report and you should be fine. You will not be reported late unless you paid your payment more than 30 days past the due date.
Is it considered late if I won't be able to pay until the 20th?
For purposes of VA underwriting, no. VA considers a late payment to be more than 30 days past the due date. If you make your payment on the 15th, 20th, or 25th of the month, the payment is not considered late enough to disqualify you from the program, unless of course your lender didn’t receive the payment until 30 days after the due date.
However, keep in mind that if you make your payment past the 15th, you are usually subject to late fees. To make sure you avoid extra costs, you should try to make your payment each month as close to the 1st as possible.
Can I refinance my hybrid ARM loan if it’s in a fixed period?
Yes, an VA hybrid ARM such as a 3/1 or 5/1 can be refinanced into a 30-year fixed loan whether in its initial fixed period or adjustable period. Different net tangible benefit rules apply in each instance.
How long do VA IRRRLs loans take?
A general rule of thumb for the length of time it takes to complete a VA IRRRL or Streamline is 30 days. However, it is very possible to complete a VA IRRRL in as few as 10 days. We suggest asking your loan officer this question as he/she will have a better understanding of the details of your individual situation and loan. VA IRRRLs are much faster to process since an appraisal is not required, we do not need to verify income or assets and will not conduct a property inspection.
Should I not refinance unless I can reduce my rate 1%?
No. Traditional logic says you need to save 1% or 2% to benefit from a refinance transaction. This may be true on a conventional loan where you are required to complete an appraisal, requalify for the new loan and pay closing costs. The cost and effort required to take advantage of this program greatly reduces the hurdle required to benefit from a refinance. At Oceanside, we have determined that there is a “Net Tangible Benefit” from refinancing anytime you can reduce your interest rate at least 0.5%.
Who do I make my payments to after the loan closes?
In many instances, you will pay your loan payments to Oceanside Mortgage Company after you close. In the rare occurrence where your loan is sold to another lender after you close, you will receive a First Payment Letter/Coupon which will guide and instruct you on where to mail or send your mortgage payments. If you ever have questions of confusion on where to send your payments, please contact us for assistance. If your loan is sold to another investor, the loan terms will remain the same.
Can I do a NO Cost loan?
Yes of course! Oceanside Mortgage Company will pay your third party closing costs for the VA IRRRL. As always, we will not charge any lender or appraisal fees. We keep your loan amount as low as possible to maximize your loan benefit.
What is the “Initial Closing Disclosure” ?
The “Initial Closing Disclosure” is provided once your application is approved and your payoff received. This is still an estimate, as we may still be waiting for your property taxes and current escrow balance to be verified. Your loan officer will review the final closing disclosure with you prior to closing. By signing the initial closing disclosure, you are just acknowledging receipt and we can close your loan sooner.
Will I have to pay closing costs?
Oceanside Mortgage doesn’t charge any lender fees and we pay the 3rd party closing costs for the VA IRRRL. The only amount added to your loan is a small fee to the VA. This fee is called a VA Funding Fee. This fee can be financed into your new loan so that you do not have to pay it out of pocket. If you are a disabled Veteran, the VA will waive this fee, otherwise, the fee will be 0.5%.
Where do I go for my closing?
Our goal at Oceanside Mortgage is to make your loan process as effortless and easy as possible. We offer the option to close at your home or any location you desire at the time you prefer.
What about taxes and homeowner’s insurance?
The VA requires that you escrow for property taxes and homeowner’s insurance. We can either use the funds in your existing escrow account to establish the new account or add the escrows to your new loan. If we add the escrows to your new loan, you will get a refund from your current escrow account that you can use as you wish. As part of the process we verify the tax and insurance amounts and make sure your new escrow account is established with sufficient funds.
I have an escrow shortage. How does that factor in?
This is the perfect time to utilize the VA IRRRL. We can add your shortage to your payoff amount to get your escrow account back in balance. You can start the new mortgage without a shortage added onto your regular payment, keeping your payment as low as possible.
Oceanside Mortgage Company offers a no closing cost option in an effort to minimize the money added to your loan and doesn’t require an appraisal for IRRRL refinancers. Borrowers can also skip their next mortgage payment and transfer their escrow account into their new loan without worrying about extra fees like credit report or application fees.
Oceanside Mortgage Company is a private corporation. Oceanside Mortgage Company is not acting on behalf or at the direction of HUD/FHA/VA/USDA or the Federal Government. By refinancing your existing loan, your total finance charges may be higher over the life of the loan. NMLS# 80015 Visit the Nationwide Mortgage Licensing System & Registry consumer access website for licensing information: www.nmlsconsumeraccess.org Website authorization by the New York State Department of Financial Services is pending. Until this website is authorized, no mortgage loan applications for properties located in New York will be accepted through this site