With the multitude of home loan refinancing options that are presently available to most homeowners, it’s essential to weigh the pros and cons of each home loan refinancing program to ensure favorable rates surrounding the mortgage and accumulating interest in the future. Having made that mention, exploring the tremendous opportunities that home refinancing offers through the VA can be extremely prudent if the right qualifications & inclinations are in order. For instance, most VA home loans that are used for refinancing often require no mortgage insurance (PMI, MIP), less-restrictive credit score requirements, cheaper closing costs, and forgo the need of a down payment. How this is accomplished can be summed up quite simply: the Department of Veterans Affairs (VA) lends support to portions of the VA home loan being used for refinancing against the potential of default; thus enabling lenders to offer VA home loans that simultaneously feature favorable interest rates and payment terms while eliminating any down payment requirements. Furthermore, through the benefits offered by VA home loan refinancing, many homeowners are able to actively ‘overpay’ on their VA home loan to reduce loan terms without incurring fees or penalties that are commonly associated with other home loans being used to refinance an existing home mortgage.
For homeowners seeking to lower their interest rate on their mortgage or reduce the term parameters set by their original VA home loan, taking stock of the positives that VA streamlined refinancing offers is an option well worth considering. Taking advantage of the VA’s Streamline Refinance program (otherwise known as VA-to-VA loan refinancing or Interest Rate Reduction Refinancing Loan - “IRRRL”) is undeniably preferred by homeowners who are refinancing their home to reduce interest rates without the need of substantial (if any) out-of-pocket costs. Additionally, refinancing one’s home through the VA’s Streamline Refinance program (IRRRL) also can greatly reduce, if not eliminate altogether, the typical requirements of a down payment at the time of the home loan’s approval.
In order to qualify for a VA home loan to refinance a home, the homeowner must first meet certain criteria in place to safeguard the lender as much as the borrower in the event of a defaulted home loan or foreclosure of the property. Often, a minimum credit score of at least 580 is the lowest credit score that is accepted for the approval of home loan refinancing through a VA home loan. Furthermore, the biggest qualification that is required to obtain refinancing for a VA home loan is the veteran status or military affiliation with the United States Armed Forces.
You may be eligible for a VA loan if you meet one or more of these criteria:
All eligible applicants who are applying for VA home loan refinancing must have, (themselves or a spouse), served in one of the military branches currently protecting the United States: Army, Navy, Air Force, Marines, Coast Guard, Reserves.
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