VA IRRRL Streamline Refinance

Review Your Current Mortgage

An existing VA loan

The mortgage being replaced must already be a VA loan on the same property. An IRRRL cannot replace an FHA or conventional mortgage.

Payment history

Have your recent mortgage payments available for review. Late payments, a loan modification, or prior forbearance may require additional evaluation.

Current or previous occupancy

You must be able to certify that you live in or previously lived in the home. Tell us if you have moved and now rent it out.

Any second mortgage or HELOC

That lender must agree to remain behind the new VA mortgage. The IRRRL cannot pay off that separate debt.

Meet Both Waiting Period Requirements

Six consecutive monthly payments

You must have made at least six consecutive monthly payments on the VA mortgage being refinanced.

210 days from the first payment due date

At least 210 days must have passed since the first payment was due when the new refinance closes. Count from the first payment due date, not the original closing date.

Confirm the eligible closing date

Both requirements must be satisfied. Send us the first payment due date and current mortgage statement so we can review your timeline.

Replacing One Fixed Rate With Another

The new interest rate must be at least 0.50 percentage points lower. For example, moving from 6.50% to 6.00% meets that rate reduction threshold. Costs and the other program requirements still need review.

Changing Between Adjustable and Fixed Rates

Different benefit rules apply when the loan type changes. Moving from an adjustable rate to a fixed rate may be allowed even if the interest rate increases. We review the proposed payment and applicable requirements before recommending an option.

Loan and Settlement Costs

Your estimate may include lender fees, title and settlement charges, recording fees, and any discount points selected for the rate. Review the itemized charges and available credits rather than the interest rate alone.

The VA Funding Fee

The IRRRL funding fee is generally 0.5% of the loan amount unless you are exempt. Borrowers receiving VA compensation for a service connected disability are generally exempt, and other exemptions may apply. We verify your status.

Prepaid Interest and Escrow

The closing date affects prepaid interest. A new escrow account may also require money for property taxes and insurance. These amounts affect cash needed but should be identified separately from lender and settlement fees.

Ways to Cover Eligible Costs

Eligible costs can generally be paid at closing or included in the new loan, subject to program limits. A lender credit may also be available, often with a higher rate. Compare the cash needed, payment, and new balance.

Understand VA’s Cost Recovery Test

A required comparison

For a payment reducing IRRRL, covered refinancing costs generally must be recovered through principal and interest savings within 36 months.

Not every charge is included

The required calculation excludes the VA funding fee, taxes, escrow, and specified prepaid expenses. Financed covered costs still count.

Special rules for other payment changes

If principal and interest stay the same or increase, different cost restrictions apply. We check the requirements for the proposed loan.

Make the Decision Fit Your Plans

Compare the actual loan savings

Separate principal and interest savings from changes in taxes or insurance. An escrow adjustment is not a lower mortgage interest cost.

Review the new balance and payoff date

Look at all costs, including any financed funding fee, alongside the new term. A lower payment may come with more years of repayment.

Consider how long you will keep the loan

If you plan to sell soon, compare the savings before that sale with the cost of refinancing. Passing VA’s test does not automatically make the refinance worthwhile for you.

Start With Your Current Loan

Recent mortgage statement

Include the current balance, interest rate, and payment. Identify taxes and insurance separately if they are included in the payment.

First payment due date and payment history

These help establish the refinance timeline. We can explain what records are needed to verify the existing mortgage.

Property use and any other mortgage

Tell us whether you still live in the home and whether a second mortgage or HELOC is in place.

Confirm What Your New Loan Requires

Funding fee exemption information

Let us know about VA disability compensation or another potential exemption so it can be verified.

Appraisal and credit requirements

VA generally does not require a new appraisal or full credit underwriting for a standard IRRRL. Exceptions and additional lender requirements apply.

Any change in borrowers or payment

Tell us if someone needs to be removed from the mortgage or if you are considering a shorter term. Those details can change the required review.

A Potential Fit

You already have a VA mortgage, meet the timing and benefit requirements, and expect enough savings or payment stability to justify the costs. Reduced paperwork may make the process more convenient.

A Reason to Pause

You expect to sell before recovering costs, the payment reduction mainly comes from extending repayment, or financed fees add more to your balance than you are comfortable owing. Review those tradeoffs before committing.