VA IRRRL



These three pieces of information will allow you to determine your breakeven point and whether it will be soon enough to benefit you before you intend to move

 
  1. How long do I intend to stay in my home?
  2. How much will I save per month by refinancing?
  3. How much are my closing costs going to be to refinance?
One of the greatest benefits of the VA Home Loan Program is the Interest Rate Reduction Refinance Loan option.  This more commonly referred to as the IRRRL.  The IRRRL is a streamlined refinance program allowing the borrowers to take advantage of lower mortgage interest rates available.

To qualify for an IRRRL a borrower must have an existing VA loan and must be lowering the interest rate with the refinance.  Being a streamlined program, there is far less documentation required from the borrower in order to qualify than the typical rate and term refinance transactions.  The mortgage and real estate crash of 2008-2009 did cause lenders to tighten up some, but the IRRRL is still one of the most beneficial refinance programs.  Also, being located in Nebraska, we did not see the dramatic decline in property values other areas of the country witnessed.

When deciding whether or not to refinance your current loan, it is important to do some research prior to moving forward.  There are several key misconception out there about refinancing. The number one misconception we hear is, “I have to lower my interest rate by at least one percent to get a benefit.” Maybe this is true in certain cases but in general it could cost people thousands by not doing more research.

For example, a $50,000 loan vs. a $200,000 loan will have a significantly different savings from a one percent drop in rates. Also, the closing costs as a percentage of the loan amount are much greater for  a $50,000 vs. a $200,000 loan and will make the breakeven point much longer.


 
These three pieces of information will allow you to determine your breakeven point and whether it will be soon enough to benefit you before you intend to move.

 


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