VA Streamline Refinance FAQ
What is a VA Streamline Refinance Loan?
A VA Streamline Refinance Loan is a loan that people with existing VA Loans can get to renegotiate the terms of their loan. Many veterans with existing loans that have fallen on hard times financially get a VA Streamline Refinance Loan because it allows the borrower to skip up to two mortgage payments, as well as enjoy a lower monthly interest rate.
Can I get cash from streamline refinancing?
No. VA Streamline Refinance Loans benefit VA Loan borrowers in that they allow them to pay less each month for their mortgage, but no cash is available from a VA Streamline Refinance Loan. For veterans with existing VA Loans who need an influx of cash, a VA Cash-Out Refinancing Loan is most likely a better option than a VA Streamline Refinance Loan.
Who is eligible for a VA Streamline Refinance Loan?
Veterans, military personnel and surviving spouses can get a VA Streamline Refinance Loan provided it will give them a lower interest rate than they currently have. In addition, they cannot have had more than one 30-day late payment in the last twelve months and cannot have been dishonorably discharged. Veterans from Desert Storm qualify automatically for streamline refinancing.
What are the benefits of VA Streamline Refinancing?
If borrowers have monthly mortgage payments they struggle each month to pay, a VA Streamline Refinance Loan can be like a breath of fresh air. They can get a much lower monthly rate, and don’t need to furnish income documentation or a job verification to qualify.
In addition, existing VA Loan holders whose current loan is an ARM can switch to a fixed rate with streamline refinancing. VA Streamline Refinancing Loans also give qualified borrowers the option of adding in up to $6,000 in energy efficiency improvements. And since VA Streamline Refinance loans can be processed using the previous paperwork of the original VA Loan, they can be processed much faster than the original loan. There is no limit to the number of times you can get a VA Streamline Refinancing Loan, and many veterans use continuous streamline refinancing.
What are some of the stipulations of a VA Streamline Refinance Loan?
With a Streamline Refinance Loan, you can’t receive more money than the remaining balance on the existing VA Loan and some fees and closing costs. The VA doesn’t require a home appraisal or credit underwriting package either, so even if you have poor credit, you can still qualify for VA streamline refinancing.
Can I get a VA Streamline Refinance Loan to refinance my conventional loan?
No, Streamline Refinance Loans can only be issued to parties with existing VA Loans. In addition, the VA Streamline Refinance Loan can only be used to pay off the current VA Loan. The lender will use the previous entitlement when processing the new loan.
Do I have to pay any money out-of-pocket with a VA Streamline Refinance Loan?
In most cases, VA streamline refinancing can be done with zero money out-of-pocket.