The VA Streamline loan provides veterans with a mortgage refinance with limited documentation. Just how much documentation do you need? We help you understand the process you go through here. While you don’t need a lot of paperwork, there is still some you must provide. Knowing ahead of time what to expect can help you prepare for the process.
Loan Application
Just like any other loan, you must fill out the loan application. On the application, you disclose all information it requires. This means:
- Name and address
- Previous addresses
- Social security number
- Employer and contact information
- Income amount
- Liabilities and their amount
The lender uses this information to process your loan. They need to know things like the amount of your income and liabilities. However, they may not verify it. It depends on the lender, though. The VA doesn’t require verification of these items, but some lenders still do.
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Required Paperwork
There are several military documents you need. These documents help the VA know you understand your loan. The documents are as follows:
- Interest Rate Reduction Refinancing Worksheet – This form helps the lender come up with the right loan amount. The VA IRRRL program only allows you to refinance your outstanding principal plus any applicable fees. The IRRRL worksheet helps the lender determine this amount.
- VA Comparison Worksheet – This document helps lenders see the benefit of your VA refinance. If there isn’t a benefit (you don’t save money), you aren’t eligible for the VA IRRRL program.
- Intent to Proceed – Signing this document shows that you intend to pay off your existing mortgage and take out a new one. It also states that you understand there are fees and you are willing to pay them.
- Certificate of Eligibility – This shows the lender that you are entitled to a VA loan. Even though you currently have one, the lender must know how much entitlement you have left.
What you Don’t Need for the VA IRRRL
The paperwork may seem a little daunting for the VA IRRRL program. The good news, though, is that you don’t need to provide a lot of your own documentation. You don’t need an appraisal, paystubs, or proof of your assets. The lender may use your qualifying factors from the original VA loan to qualify you for the loan.
The one thing you need is a timely mortgage history. Your VA payments for the last 12 months should be on time. If you have any late payments, you can’t have more than 1 in the last 12 months. If you have more than 1, you’ll have to wait until another 12 months pass.
Who Qualifies for a VA IRRRL?
The VA has 2 requirements. One of which we talked about above, the timely mortgage payments. The other requirement is you must have a benefit for refinancing. In other words, you must save money. Usually this means a lower interest rate. If, however, you refinance from an ARM into a fixed rate loan, this is a benefit. Your interest rate may even increase in this case, but it’s okay. As long as the payment doesn’t increase more than 20%, you don’t have to verify anything.
Basically, the VA IRRRL is for veterans who want to save money every month. With very little underwriting and low fees, you can start reaping the savings right away.
The paperwork for the VA IRRRL really is no big deal. Aside from signing a few documents, you have little work to do on this loan. You did the hard work when you applied for your original VA loan. Now you get to enjoy the benefits of a lower payment while still keeping the reputable VA loan.
