VA Streamline Refinance in Mississippi
The VA Interest Rate Reduction Refinance Loan (IRRRL), also referred to as a VA Streamline Refinance, is a specialized refinancing program designed for active-duty military or veterans in the state of Mississippi with an existing VA home loan. It allows our military members to reduce their interest rate and monthly payments by refinancing with minimal documentation and no out-of-pocket costs.
VA Streamline IRRRL Requirements
You may be eligible for a VA IRRRL if you meet the following guidelines:
- Existing VA loan: The IRRRL is only available for properties that were originally financed with a VA loan. Borrowers with non-VA loans cannot use this option but may explore the VA Cash-Out refinance option.
- Previous occupancy of the home: You only need to certify that you currently live or have previously lived in the home. Unlike VA purchase loans, there is no requirement to occupy the property as your primary residence.
- Flexible income and employment requirements: Income verification is typically not needed unless the new mortgage payment increases by more than 20% or there are concerns about income stability. Lenders may still ask for a two-year employment history.
- Net tangible benefit: The VA requires all refinances to result in a tangible benefit for the borrower, such as a lower interest rate, lower monthly payment or move from an adjustable to fixed rate mortgage. Lenders may also have restrictions on how long it will take to recoup the costs and fees associated with the new loan.
- Loan seasoning: Lenders may require you to hold your current VA loan for a minimum period and make at least six months or 210 days of payments before qualifying for an IRRRL.
- Maximum loan term: The new loan's term cannot exceed the original VA loan term plus 10 years, with a maximum limit of 30 years and 32 days. For example, a Veteran refinancing a VA loan with a 15-year term could have a maximum 25-year term on the IRRRL.
In most cases, appraisals and credit underwriting are not required for a VA IRRRL to streamline the process. However, credit score, appraisal and loan-to-value requirements may vary depending on the lender.
Note: If you have a second mortgage on the home, the holder must agree to make your new VA-backed loan the first mortgage.
Why might I want to get an IRRRL?
Often called a "streamline" refinance, an IRRRL may help you to:
- Lower your monthly mortgage payment by getting you a lower interest rate,
or - Make your monthly payments more stable by moving from a loan with an adjustable or variable interest rate (an interest rate that changes over time) to one that’s fixed (the same interest rate over the life of the loan)
On a no-down-payment loan, you can borrow up to the Fannie Mae/Freddie Mac conforming loan limit in most areas—and more in some high-cost counties. You can borrow more than this amount if you want to make a down payment.
Learn about VA home loan limits
You’ll want to keep closing costs in mind when refinancing a loan, as they can add up to thousands of dollars. Before you decide to refinance, divide your closing costs by how much you expect to save every month by refinancing to see if it’s worth it. While your lender can advise you on the costs and benefits of the transaction, you’ll want to be sure you understand what you’re getting into.
Visit the Consumer Financial Protection Bureau for more information
How do I get an IRRRL?
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Find a lender
You’ll go through a private bank, mortgage company, or credit union—not directly through us—to get an IRRRL. Terms and fees may vary, so contact several lenders to check out your options.
Note: If you have a VA home loan be careful when considering home loan refinance offers. Claims that you can skip payments or get very low interest rates or other terms that sound too good to be true may be signs of a misleading offer.
Learn more about the signs of misleading refinance offers -
Give your lender any needed information.
If you have the Certificate of Eligibility (COE) you used to get your original VA-backed home loan, take it to your lender to show the prior use of your entitlement. If you don’t have your original COE, ask your lender to get your COE electronically through the VA Home Loan program portal.
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Follow your lender’s process for closing on the IRRRL loan, and pay your closing costs.
You may need to pay the VA funding fee. This one-time fee helps to lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn’t require down payments or monthly mortgage insurance. Your lender will also charge interest on the loan in addition to closing fees.
IRRRL Program FAQs
Let’s walk through some of the most common questions about VA IRRRLs and what homeowners can expect throughout the process.
IRRRL stands for Interest Rate Reduction Refinance Loan. It's also referred to as the VA Streamline refinance.
Generally, the borrowers on the original VA loan need to be on the new IRRRL unless the death or divorce of an applicant occurs. Lenders usually can't remove a currently married or separated spouse from the new loan if they're obligated on the old one.
VA IRRRLs are unique in terms of VA loan entitlement. Getting an IRRRL does not require the use of a new or additional entitlement. Whatever amount of VA loan entitlement was used to secure the original purchase loan remains the same for the new loan, regardless of the loan amount.
Having a higher or lower loan amount on the IRRRL can affect the guaranty amount, which reflects how much lenders would recoup in the event of default. But it cannot affect the amount of a Veteran’s previously used entitlement.
An IRRRL is generally a form of refinancing where no cash-out is allowed. However, as much as $6,000 in additional money may be borrowed to cover the cost of qualified energy efficiency improvements completed within 90 days before closing. Ask your lender for details.
Closing costs and fees for a VA IRRRL can vary by lender, but typically range from 3% to 5% of the loan amount. Borrowers can typically roll these into the final loan amount instead of paying the costs upfront. Ask your lender for details or talk with a Peoples Bank & Trust loan specialist at 1-800-697-4371.
Refinancing to a 15-year mortgage is entirely possible and very common. The lifetime interest cost of a shorter loan will be less than a 30-year mortgage. However, the monthly payments on a 15-year mortgage can be significantly higher.
Look at both the monthly payments and lifetime interest costs to see if a mortgage with a shorter term makes sense.
Refinancing may result in higher finance charges over the life of the loan.
