A simplified VA refinance may not be worth it if you pay more in closing costs than you'll save. And it won't help you withdraw the net value of your home. If you want to refinance with cash repayments to pay for home improvements, for example, you'll need to use the VA cash out refinance or another cash out loan program. An exception is the Energy Improvement Mortgage (EIM), which can be used in conjunction with any VA refinancing, including the IRRRL.
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. Veterans and active military personnel may be eligible for the IRRRL program, which allows VA loan holders to refinance at a lower interest rate or a lower monthly payment. 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.
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). For an existing VA loan to qualify for an IRRRL, an adjustment period of 210 days is required starting from the date of the first payment or after the sixth monthly payment (whichever is longer). You'll need to apply for an IRRRL through a bank, credit union or mortgage company, rather than through the VA.
