Homes are expensive, and paying off loans takes a great deal of time and money. Any veteran thinking about refinancing their house, or who just needs a way to reduce their interest rates, should look into an Interest Rate Reduction Refinance Loan (IRRRL), which can reduce the interest rate when a VA home loan is refinanced.
This loan is only an option on real estate that was originally purchased with a VA loan, but they're relatively easy to acquire. If you currently have an adjustable rate mortage, you may opt for a fixed mortage rate when applying for the IRRRL. There's no appraisal, credit underwriting, or certifiicate of eligibility requirement, and you don't need to use any money out-of-pocket.
Currently, interest rates on these loans are low, so it's worth learing about refinancing opportunities. Frank Nothaft, vice president and chief economist at Freddie Mac. says that, "On average, borrowers who refinanced reduced their interest rate by about 1.8 percentage points." This means that, on average, homeowners save about 33 percent on their interest rates.
Below are some more details about qualifying for and using an IRRRL, from the Houston VA Loan Center:
For more on the IRRRL process, visit the Military.com Refinance section.
|VA Loan Refinance|
As you probably know, there are a handful of people who write almost exclusively about military families and their money. One of these writers, Rob Aeschbach, is also a Certified Financial Planner™ candidate. I wanted to see what nuggets of wisdom Rob could share, and learn more about how a financial planner can help military […]