The VA Home Loan and Interest Rate Reduction Refinancing Loan Program

Thousands of US veterans are eligible to receive support for home purchase and building thru the Home Loan Program of the US Department of Veterans Affairs. These programs which offer veterans new options for getting a home loan and for refinancing previous loans made under earlier VA programs. Veterans can often receive loans for purchasing a property or for building a house on a property as wells as receive a streamline or interest rate reduction refinancing loan to lower their interest rates and total costs.

How the VA Loan Program Works

The VA home loan program actually works by standing behind veterans to effectively guarantee the loans that they make. By essentially providing a way for lenders to claim any losses if the veteran fails to pay his or her loans, the government, thru the Department of Veterans Affairs actually attracts more lenders to provide loans to veterans giving the veterans a more competitive loan market to participate in. This rationale also applies to VA refinance loans and it is often the reason behind the availability of lower interest rates in the first place.

The IRRRL and Refinancing

The VA IRRRL is an option that veterans can consider to effectively and immediately reduce the interest rates that they are paying for specific VA loans that they have taken in the past. This particular refinancing option is very attractive today especially because of the historically low interest rates available in the market today provided by VA approved lenders. The IRRRL is actually a great option because the completion of the loan must result in a lower interest rate and also allows moving from and adjustable rate mortgage to a fixed rate mortgage which is preferable in many cases.

Benefits of VA Refinancing Options

One major advantage of the refinancing options offered by the VA is that there is no appraisal or credit underwriting requirements required by the VA itself. Eligible veterans also no longer need to acquire a certificate of eligibility for refinancing as the VA has placed and e-mail based confirmation procedure to be used by lenders. Also, because a VA IRRRL can be processed by any lender of the veteran’s choice, there is a larger pool of lenders to choose and shop from and which will undoubtedly lead to better rates and terms offered. Although the veteran should not receive any cash from the loan proceeds, he or she still gains because the loan can be made with no money out of pocket by including all costs to the new loan. For refinancing, it is highly advisable for veterans to contact experts in VA loans and VA approved lender to ensure getting the best deals and terms in the new loan and increase the total savings from the new interest rates to be taken.