There is no need to verify the income of all borrowers on the VA payline. This means that, unlike the original VA loan, when payment receipts, W2 forms and tax returns were provided, the IRRRL does not require any type of income verification. Homeowners find this type of loan useful because the VA doesn't require an appraisal, asset test, or income verification. It is possible to refinance even if the borrower has experienced a drop in the value of the home, has reduced their income since the purchase, or has little money in their checking and savings accounts.
The IRRRL is a refinance loan program that dramatically reduces the paperwork and process required to approve a VA refinance application. Since the VA IRRRL is designed as a simplified rate and a term refinance, you can't use it to borrow money from the value of your home. You must have made at least six full mortgage payments on your current mortgage to qualify for a VA IRRRL. For example, a veteran who is refinancing a 15-year VA loan could have at most a 25-year term in the IRRRL.
For example, if you are currently renting the home, but originally purchased it as a primary residence, you may qualify for a VA IRRRL. A VA IRRRL offers the best benefits and terms of any available refinance mortgage, including the lowest average interest rates. While withdrawing cash from the VA is not as practical as doing so in a simplified way, the necessary measures are required to take advantage of the additional benefits they offer. VA cash out loans are different from simplified VA loans in that they require the borrower to submit documentation, such as pay stubs, W2 forms, an appraisal and bank statements.
