If you want to free up space in your monthly budget, reducing housing costs can help. For VA loan borrowers, the VA IRRRL program is one of the best options to consider. Without paying much, you could end up saving a lot of money, depending on your current rate and the new rate and conditions you can set. As you evaluate your options, use Bankrate's VA loan calculator to estimate your new payment.
While you don't have to meet any income or home value requirements, the VA IRRRL has other very specific requirements that you'll need to overcome for approval. Usually, you'll need to pay a funding fee with a VA IRRRL, but you should know that the fee represents only 0.5% of the loan balance, compared to 2.15-3.5% for normal VA refinances (with a cash out option). If you already have a VA loan, you may be eligible to refinance and save money without having to apply for the VA Lowered Interest Rate Refinance Loan (IRRRRL). For example, if your current mortgage rate is 6% and the current VA mortgage rates are 4%, then yes, you can lower your rate by refinancing with an IRRRL.
A VA Lowered Interest Rate Refinance Loan (IRRRRL) refinances an existing VA loan, but without many of the requirements that apply to a typical refinance. That's because an IRRRL doesn't require an appraisal or credit subscription package, which means you can probably get approved even if your credit score or financial situation has worsened since you first applied for your VA loan. If you don't have a lot of equity in your home, a VA IRRRL is probably more realistic than a conventional or cash-out refinance.
