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The Veteran Affairs allows Armed Service members and veterans to purchase or refinance residential property by availing several advantages. Unlike conventional mortgage loans, the veteran borrowers can avail VA home loans by paying a lower interest rate, and without making any loan down payment. At the same time, the veterans also have option to refinance their existing VA loans to interest rates and payments, along with avoiding foreclosure charges. However, you must understand the legal guidelines related to VA lending to ensure that the lender following the right process. Interest Rate Reduction Refinancing Loans: The VA streamline loans are also referred as interest rate reduction refinancing loans (IRRRL). The IRRRL program is designed by the VA with the intention of helping the borrowers in availing a tangible benefit. Normally, the borrowers refinance their existing VA home loans to obtain reduced interest rate. But the program also allows them to convert their mortgage loan into a fixed-rate loan. If you decide to refinance your existing mortgage into a fixed-rate loan, there are chances the mortgage rate will increase. However, the increase in interest rate is also considered as a tangible benefit. No Credit Checks: No borrower can avail a conventional home loan without comprehensive credit checks. The process of evaluating a borrower’s credit history and records often delays the loan approval process. But a VA loan can be streamlines without any credit check. As per the VA requirements, the underwriting department is not requires to perform a credit check. The absence of credit check will further result in speeding up the refinance process. So you can get a VA streamline refinance within a lesser number of days, in comparison to the time required for underwriting a conventional home loan. No Appraisal: Similar to credit check, the VA also does not require the borrower’s property to be appraised when he is streamlining his existing mortgage loan. Normally, the appraisal of a property takes about five days. However, the duration of the appraisal process also differ based on certain factors like comparable property analysis and the appraiser’s schedule. So the no appraisal also contributes towards reducing the normal time required for VA streamline refinance. Selection of Lender: Despite setting guidelines for underwriting VA mortgage loans, VA cannot acts as a direct lender. The VA streamline loan must be financed by private or individual lenders. So the lender may initiate credit check and property appraisal according to its own underwriting guidelines and standards. As the VA will not accept the risk burden, each lender wants to refinance VA loans only after taking adequate protection. It is a good idea to gather information from various lenders, and choose the right streamline option after comparing the terms offered by individual lenders. Additional Restrictions: When you decide to refinance your VA mortgage loan under the IRRRL program, you are not allowed to take cash out of the fresh refinance. The only intention of the program is to help veteran borrowers in decreasing the new cost loan by availing lower rate of interest. Also, the amount of the refinance loan cannot exceed the value of your existing mortgage obligation. Author Bio: MyVaRefinance.net deals with VA loans, VA refinance loan and explore VA mortgage rates. For know more our service feel free and call us at : 1-866-236-0549 or email us : Info@MyVaRefinance.net
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