A Veteran Advantage: How Many Times Can You Use a VA IRRRL?

Eligible veterans who already have a loan backed by the U.S. Department of Veterans Affairs (VA) may have access to another huge advantage: A VA Streamline Refinance or VA Interest Rate Reduction Refinance Loan (VA IRRRL). This type of refinance touts some favorable terms that borrowers may be able to take advantage of. You may actually be able to take advantage of a VA IRRRL multiple times.  

 There’s no limit to the number of times you can refinance your home with a VA IRRRL, but there are some guidelines you’ll need to follow and requirements you’ll need to meet. Read on to discover what these are.

Eligibility Criteria 

While specific eligibility requirements may vary by lender, these are ones set by the VA: 

• You must already have a VA loan 

• You must certify that you live in or used to live in the home covered by the VA loan 

• You must use the VA IRRRL to refinance your existing VA loan 

• If you have a second mortgage on your home, you must make your new VA loan the first mortgage 

You also may need to be current on your mortgage payments. If you’re late on your payments, you may still be approved but your lender will likely need to do a credit check and thoroughly review your finances to decide if you can be approved for a VA IRRRL.

Advantages of Repeated Use 

No matter how many times you get a VA IRRRL, the advantages are typically the same. Some of the main reasons to get a VA streamline refinances include potentially reducing your monthly payments with a lower interest rate and potentially making your payments more stable by converting an adjustable-rate mortgage to a fixed-rate mortgage so that your interest rate is generally the same throughout the life of the loan.  

But there are also some other reasons borrowers may find that a VA IRRRL is a great refinance option. These loans typically have limited paperwork, lower interest rates and no private mortgage insurance (PMI). However, every transaction is different, so make sure you speak with your lender to understand the full scope of your own advantages when you get a VA IRRRL.

Cost Considerations 

When getting a VA IRRRL, there are some costs you usually need to keep in mind. One of the most important costs is the required VA funding fee and closing costs, which are dependent on the loan amount. You may be able to roll these costs into the loan but be mindful that these could raise the loan balance and interest charges.  

Additionally, if you extend your loan term for lower monthly payments, your interest rate may increase and paying back the loan can take longer.

Application and Refinance Process 

Many borrowers opt for a VA IRRRL for its general simplicity and many advantages. This includes the process of applying for this type of refinance as well.  

1. Work with a Lender to Determine Eligibility: While you can check with the VA website to see if you’re eligible for a VA IRRRL, you may want to work with a lender experienced with VA loans to verify that your specific loan can be refinanced. The one you received your original VA loan from could be a good start, but it doesn’t hurt to shop around for the potential for a more favorable rate or term. 
2. Provide Your Lender with Documentation: Check with your lender about all the required documentation needed to apply for a VA IRRRL. While there’s typically less paperwork required for this type of refinance, there are still some necessary documents you need to submit. 
3. Close on Your Loan: Work with your lender to go through the refinance process, pay the VA funding fee and other applicable fees and close on your new loan.

Comparison with Other Refinance Options 

You may be wondering why you should get a VA IRRRL as opposed to some other refinance loan types. Here are some other refinance options you may want to consider and how they compare to a VA IRRRL. 

VA Cash-Out Refinance 

If you need some money in your pocket, you may not want to opt for a VA IRRRL as you’re not allowed to get cash back with one. A VA cash-out refinance may allow you to take cash from your home’s value while replacing your current mortgage. You may also be able to use this type of refinance whether or not you already have a VA-backed loan. 

Rate-And-Term Refinance 

When interest rates are lower and you may be able to get more favorable terms with a lender, you may want to get a rate-and-term refinance, which allows you to change the interest rate and loan terms of your mortgage. While the loan amount remains the same, you may be able to end up with lower monthly mortgage payments or pay off your loan faster. This type of refinance is highly similar to a VA IRRRL but doesn’t have the same advantages, like typically minimal paperwork and potentially no appraisal or PMI. 

No-Closing Cost Refinance 

This type of refinance may allow you to roll closing costs into the principal loan balance or have them covered with a higher interest rate. However, you may have to pay a higher monthly payment over the life of the loan because of the higher interest rate. Unlike this type of refinance, a VA IRRRL may have low to no closing costs and lower interest rates. Please note that not all lenders offer no-closing cost refinances so make sure you check with yours.

Work with VA Resources 

As an eligible veteran borrower, you may have many advantages at your disposal when it comes to your VA loan. Make sure you work with a reputable lender who is experienced with VA loans and consult the VA website if you do decide to apply for a VA IRRRL. While you may want to take full advantage of VA loans, it doesn’t hurt to closely work with and use the resources that may be available to you.