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Guide on VA Streamline Refinancing


Introduction:

Have you bought your home with a VA loan? If yes, you can now enjoy the option of VA Streamline Refinance.


What is a VA Streamline Refinancing?


VA Streamline Refinancing is a VA loan program that allows veterans to refinance their existing Texas VA home loans into another VA Loan with a lower interest rate and better loan terms. Veterans have to use the loan amount to pay off their current VA loan. Thus, you will have lower monthly payments than the existing mortgage payment. The new loan can be for 30 or 15 years, depending on your choice.


With a VA Streamline refinancing, you can also change from an adjustable-rate mortgage to a fixed-rate mortgage. VA Streamline Refinance is also called VA Interest Rate Reduction Refinance Loans. (IRRRLs)


Requirements for a VA Streamline Refinancing:


To qualify for a VA streamline refinance, homeowners need to meet the Department of Veterans Affairs’ following requirements.

  • Your current loan needs to be a VA-backed home loan. And it should be about six months older or 210 days from the date of the first payment.

  • You need to be up-to-date on your current mortgage payment. Any delinquent payments on your existing VA home loans Texas may refrain you from getting VA streamline refinancing.

  • To qualify for a VA streamline refinance, you must certify that you are currently living or have previously lived in the house to be refinanced.

  • The new interest rate and monthly payment should be lower than the previous loan. However, if you switch from Adjustable-Rate Mortgage to a Fixed-Rate Mortgage, the new interest rate and monthly payment need not necessarily be lower.

Benefits of a VA Streamline Refinance:


Lower interest rate and mortgage payment: VA streamline refinancing is an option for borrowers with an existing VA loan to get a lower interest rate and lower monthly mortgage than the previous one. Thus, you save thousands over the life of the loan and every month due to smaller monthly payments.


Less paperwork:

As the name suggests, VA streamline refinances have fewer requirements and are thus simpler than any other refinances. Since mortgage lenders know that you are already VA-eligible, you do not need income proof, employment verification, credit score process, and certificate of eligibility. Thus, borrowers have less paperwork to handle.


Note: You may need credit underwriting only if you are 30 days behind on your existing VA mortgage payment.


Quick processing:

VA streamline refinancing does not need a new home appraisal. So the current market value of the house will not make a difference. This can save a week or two for refinance. Usually, the VA streamlined loan takes only up to 30 days for processing.


Lower Costs:

Refinancing should have financial gains. VA streamline refinancing does not need to make a down payment or buy mortgage insurance. However, a down payment is required if the loan value exceeds the conforming loan limit for your country.


Other closing costs are also lower than other refinances and vary from lender to lender. VA funding fee and loan origination fees are also low, about 0.5% and 1% of the loan amount. In addition, lenders in Texas charge discount points which are upfront fees for lowering the interest rate. (One discount point is equivalent to 1% of the loan amount.)

Disable veterans, spouses of veterans who have died while serving, and active veterans who have received a purple heart are exempted from paying the VA funding fee.


You can pay the VA funding fees and other associated costs when closing the loan or including the amount in your monthly mortgage payment. Thus, you have fewer or no out-of-pocket expenses when you refinance.


Remodeling benefits:

VA streamlines refinancing does allow you to borrow more than the existing VA loan amount. Thus, you cannot get a cash-out on VA streamline refinancing. However, under Energy Efficient Mortgage, you are eligible to get upto 6000$ for energy efficiency improvements.


Another benefit of VA streamline refinancing is that you do not need to reapply for the loan if your military circumstances change. But it would be best if you informed the local mortgage lenders about any change in your status as soon as possible. However, advantages of unique benefits such as lower interest rates and closing costs are available only to veterans on active duty.


VA Streamline Refinance Calculator:


Use the VA Streamline Refinance Calculator to get an instant quote on your desired interest rate and monthly payment.


You can quickly get an estimate of your pre-tax savings in the future when you refinance to a lower rate with this calculator. Just enter your current mortgage details, including the amount, interest rate, and term. It will provide you with the estimated monthly payment and total interest cost over the life of the loan.


Bottom Line:

Get multiple quotes from different lenders to get the best VA streamline refinance rates. VA streamline is easy, simple, and cost convenient but asks about lender's policies before applying.

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