VA Interest Rate Reduction Refinance Loan
Who is eligible for an Interest Rate Reduction Refinance Loan?
- Already have a VA Home Loan,
- The service member will use the IRRRL on an existing VA Home Loan,
- The service member can show that they are living in the home covered by the loan, and
- The VA Home Loan must become the primary mortage (for when there is a second mortage on a home already)
What are the advantages of getting an Interest Rate Reduction Refinance Loan?
- Lower their monthly loan payment by getting a lower interest rate,
- Make their monthly loan payment more stable by moving from a loan with an adjustable or variable interest rate (an interest rate that changes over time) to one that is fixed (the interest rate stays the same).
Do I have to make a down payment for an Interest Rate Reduction Refinance Loan?
Do I pay closing costs on an Interest Rate Reduction Refinance Loan?
- VA funding fee
- Loan origination fee
- Loan discount points or funds for temporary “buydowns”
- Credit report and payment of any credit balances or judgments
- VA appraisal fee
- Hazard insurance and real estate taxes
- State and local taxes
- Title insurance
- Recording fee
In cases where an IRRRL is used to get a bigger loan for a different home, the seller pays these closing costs:
- Commission for real estate professionals
- Brokerage fee
- Buyer broker fee
- Termite report
How do I get an Interest Rate Reduction Refinance Loan?
Find a lender
Service members will need to find a private bank, mortgage company, or credit union to get an IRRRL. The terms and fees will vary, it is recommended to contact several lenders.
Gather necessary documents for the lender and the VA.
Service members should be able to use their original Certificate of Eligibility (COE) from their first VA Home Loan to show their lender. For service members that cannot find their COE, they may request the lender to get their COE electronically through the VA Home Loan program portal.
Follow the lender’s process for closing the IRRRL and pay closing costs.
Service members may need to pay a VA funding fee to close. Their lender will also charge interest on the loan in addition to closing costs.
With an IRRRL these costs may be , so, the service member does not have to pay up front. Otherwise, the lender might increase the interest rate, so the lender pays the closing costs instead.
Where can I learn more about VA Home Loans?
More in-depth details and information can be found in the