First of all, the VA doesn't require any appraisal package or credit underwriting. However, you should keep in mind that lenders may require an appraisal and credit report anyway. 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.
In addition, there is no limit to the number of times a qualified borrower can use the VA's IRRRL program, so if rates drop even further in the coming years, you can always use this program again, Fagley explains. 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. 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. 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).
In addition, you can only apply for an IRRRL if you have already used your eligibility to apply for a VA loan on the same property you intend to refinance.
