Qualifying Veterans can lower their monthly mortgage payments with a VA loan known as an Interest Rate Reduction Refinance Loan (IRRRL). If you have a VA home loan, you can use an IRRRL to refinance your loan and lower your interest rate as well your your mortgage payments. Veterans with an adjustable rate mortgage can also use an IRRL to refinance into a fixed-rate mortgage. This option could increase, however, rather than decrease the interest rate.
There are no credit underwriting or appraisal requirements for IRRRLs. You also will not need money upfront if you either include all loan costs in the IRRRL or obtain the loan at a high interest rate which allows the lender to pay these costs. Any VA lender can process an IRRRL application, but lenders are not required to approve such loans. Because loan terms can vary, it is recommended that you talk to several lenders if you’re considering an IRRRL.
You are not allowed to receive cash from an IRRRL. It must be used solely for refinancing an existing VA loan. You can find more information on IRRLS on the VA’s website at https://benefits.va.gov/homeloans/irrrl.asp, or if you have an elder law attorney who specializes in VA benefits, he or she may be able to provide information on IRRRLs.
