If you are carrying a VA loan and want to restructure the terms of your mortgage, the
VA Interest Rate Reduction Refinance Loan (IRRRL), otherwise known as the VA Streamline Refinance program is probably the best refi option for you. Aside from it being an exclusive program for VA loan-carrying homeowners, it also has the best qualification and less hassle requirements for
– no appraisal
– no asset and income verification
– no credit score checking
Given these, you must think closing a VA loan refinance takes shorter time than any other traditional refi program. Well the answer is, it depends.
What factors affect the length of your application to closing?
First off, when shopping around for the best rates, one of the other things you should consider first is if you need to refinance fast. If you do, then you might as well factor in closing time when choosing the best lender to do business with. Ask them for their turnaround time. Many times, they vary, especially when rates are low and refinances are common.
This factor now concerns you. The sooner you turn over the necessary documents, the faster the loan can be processed, and therefore, closed. Although the VA per se does not strictly have a set of requirements for refinancers, the refinancing process itself requires any borrower to forward the following documents to their lenders:
a) the settlement statement from the closing of your original mortgage
Document requirements may vary from lender to lender.
b) bank statements for if you pay costs of closing straight from your own finances
c) the loan number and the name of your current lender
d) a proof of residency in your current home i.e., the property you are going to refinance
e) a signed disclosure certifying your validation and knowledge of the resulting arrangement of the refinancing
You must be able to show to the lender a good record of payments, without delinquencies or delays. If there are any and you can’t wait for any more time to pass so the late payment will disappear from your record, you need to be able to demonstrate to the lender that you resolved the issue and are back on making on-time payments. This might require providing the lender a letter of explanation and forwarding proofs that you’ve already gotten back on track. But if this is the case, expect it to delay the closing date.
Your Net Tangible Benefit
The VA’s aim is for the borrower to reduce his or her principal and interest payments so he or she will have a more manageable monthly mortgage payment. In your resulting refi arrangement, you need to make that obvious. Otherwise, the lender may take time evaluating your loan, such as when the resulting payments has increased in amount, or when you refinance an ARM during its introductory period.
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