I already have a VA loan. Can I refinance to a lower rate without going through a full appraisal and underwriting again?

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Accepted Answer

Short answer: yes, if you qualify for a VA IRRRL. The Interest Rate Reduction Refinance Loan (IRRRL), often called the VA Streamline Refinance, lets veterans who already have a VA loan refinance into a new VA loan, typically to lower their rate and payment or to move from an adjustable rate to a fixed rate. A few things that make it different from a purchase loan or a standard refinance: No new appraisal, and no credit underwriting package or income/asset verification are typically required. It can only be used to refinance a property you already have a VA loan on. You can't use an IRRRL to bring a conventional or FHA loan into the VA program. You can't take cash out with an IRRRL. If you want to pull equity out, you'd need a VA cash-out refinance instead, which is a different product with its own requirements. The loan has to meet the VA's net tangible benefit and seasoning rules. In plain terms, the refinance has to actually leave you better off (lower rate, more stable payment, etc.), not just generate a new loan. The VA funding fee on an IRRRL is lower than on a purchase loan, at 0.5% of the loan amount, unless you're otherwise exempt (see our funding fee exemption answer below). Because there's no appraisal or full underwriting, an IRRRL can often close faster than a purchase loan. Gene can pull your current loan details and walk through whether the numbers make sense for your situation before you apply.