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Info on VA Streamline Home Loans

irrl

By Debbie Gregory.

The Department of Veterans Affairs (VA) strives to help  servicemembers, veterans, and eligible surviving spouses obtain home loans so that they may become homeowners.

A VA loan provides a home loan guaranty benefit and other housing-related programs to help buy, build, repair, retain, or adapt a home for personal occupancy. These loans are obtained through private lenders such as banks and mortgage companies. The VA guarantees a portion of the loan, enabling the lender to provide more favorable terms.

A VA Streamline (also known as Interest Rate Reduction Refinance Loan, or by its acronym IRRL ) is a refinance opportunity that enables refinancing of a VA Loan to a lower rate, or from an adjustable rate to a fixed rate. When deciding on refinancing, it’s important to determine whether it is beneficial to do so. The general rule of thumb is that if you can refinance and reduce your interest rate by 1% then it is something worth considering. However, it’s important to consider other factors, such as closing costs and how long you plan on living in the property.

An IRRRL can only be made to refinance a property on which you have already used your VA loan eligibility. It must be a VA to VA refinance, and it will reuse the entitlement you originally used.

An IRRRL may be done with “no money out of pocket” by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs. But there is no opportunity to receive any cash out from the loan proceeds.

The occupancy requirement for an IRRRL is different from other VA loans.  When you originally got your VA loan, you certified that you occupied or intended to occupy the home.  For an IRRRL you need only certify that you previously occupied it.
The loan may not exceed the sum of the outstanding balance on the existing VA loan, plus allowable fees and closing costs, including funding fee and up to two discount points.  You may also add up to $6,000 of energy efficiency improvements into the loan.

Military Connection salutes and proudly serves veterans and service members in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve,  and their families.

Number of VA Loans Sharply Increased Following the Mortgage Crisis

va loan

By Debbie Gregory.

The Home Depot Foundation, the charitable arm of home improvement giant Home Depot, partially funded a study that revealed that home loans through the Department of Veterans Affairs more than tripled in the wake of the 2007-2009 subprime mortgage crisis.

This information exemplifies the critical need for credit in order for tens of thousands of veterans to buy a house, as well as the importance of the VA program, a benefit used by millions of veterans but often getting less attention than initiatives like health care coverage and education stipends.

“This is a stable, accessible form of credit that has helped a lot of families,” said Keith Wiley, a research associate at the Housing Assistance Council (HAC) and co-author of the report. The HAC is a national nonprofit organization that supports affordable housing efforts in rural areas of the United States. It was established in 1971 to increase the availability of affordable housing for rural low-income people.

Wiley’s report found nearly 9 percent of all home mortgages in America in 2014 were backed by VA, up from 2 percent a decade earlier.

Before the mortgage crisis, those loans totaled around 140,000 a year. Today, those numbers are closer to 510,000, making them the third-largest home loan type in the country.

“There has been a VA home loan in nearly every county in America,” said Moises Loza, HAC executive director, in a statement. “There are more than 100 counties where VA loans make up 20 percent of the loan population. … The military community truly relies on the VA Home Loan program to provide a home for their families.”

The mortgage crisis was triggered by a large decline in home prices after the collapse of a housing bubble, leading to mortgage delinquencies and foreclosures and the devaluation of housing-related securities.

Declines in residential investment preceded the recession and were followed by reductions in household spending and then business investment. Spending reductions were more significant in areas with a combination of high household debt and larger housing price declines.

Researchers said they did not see a significant drop in the rejection rate of loan applications as the total mortgage count rose in recent years, another sign they say indicates stability and accessibility for veterans.

Military Connection salutes and proudly serves veterans and service members in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve,  and their families.