The VA Streamline Refinance Program, also known as the Interest Rate Reduction Refinance Loan (IRRRL) is the best way for eligible VA borrowers to reduce their monthly mortgage payments. The very core of the program aims to save current VA loan holders from running delinquent on their loans by reducing the interest rates on the loan. The program ensures that the mortgage payments do not hinder the borrower from living comfortably.
But there’s more to the program than just the noble objective. To further aid those mortgage holders in need, the VA
Streamline Refinance guidelines is made simple and is lenient in its requirements. There is no need for a credit score check, a verification of income and assets, an LTV or DTI minimum or maximum, or a down payment.
Yet though it may seem too easy, a simple lack in requirements can put your approval at risk. Since the program does not really ask much in the first place, lenders are stringent with completeness in the needed documentations.
To help you prevent such a common error, we mapped out the necessary documents required for a VA Streamline Refinance in this article.
The VA and the lender may have different sets of requirements. Let us get to know these requirements.
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- A cover letter addressed by the lender to the VA
- A certification from your lender stating that you are on time and not delinquent on your mortgage payments
- Any documentation proving any energy efficient changes included in the loan
- A transmittal document
- A signed document by the borrower the certifies that you understand the refinance arrangement and the terms of your new loan
- Acknowledgment of Receipt of the Funding Fee signed by the lender
- COE or certificate of eligibility
- Federal Collection Policy Notice
- HUD-1 Closing Statement
- Interest Rate Reduction Refinancing Worksheet
- Report and Certification of Loan Disbursement
- VA loan summary
- A completed loan application form
- Credit report (optional)
- Executed IRS Form 4506
- Good Faith Estimate
- Truth in Lending
Although not strictly required by the VA, some lenders may still proceed to verify your finances and thus require you to forward your W2-forms for the last two years and your recent paystubs.
Other lender requirements:
- Payoff from your original lender
- A verification of your current tax property situation
- Homeowners insurance coverage and payment information
The VA IRRRL program is no doubt one of the best ways for a veteran to save money while also easing the burden of his or her mortgage. These requirements may take time and effort to procure but getting that much-needed approval makes it worth your while.
Thinking of a refi? Start here.