If you’re not familiar with VA home loan products or refinancing options you may have a few questions. Below are a few of the most common questions borrowers have about VA Streamline Refinancing. If you have a question that’s not listed below click the link at the bottom of this page and a VA approved qualified lending specialist will be happy to answer any questions you may have.
Q: Can I still utilize the VA Streamline Refinance option if my current home loan is “underwater”?
A: Absolutely, The VA Streamline doesn’t require an appraisal, meaning there isn’t a value established for the property you are refinancing. This loan is based off your existing loan not the current value of your home.
Q: Do lenders have different rules and guidelines for using the VA Streamline?
A: Yes, unfortunately. Most lenders have additional guidelines on top of what the VA requires. It’s a good idea to shop around for a lender who offers options that best meet your preferences. Always compare lenders to find the best option for you.
For example, the VA may not require an appraisal or even your credit report to get you qualified, but majority of lenders do require a credit report, and many even require an appraisal for a VA streamline. It all depends on the lender you choose.
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Q: Will I need my Certificate of Eligibility for a VA streamline?
A: Nope. Your Certificate of Eligibility or COE is only needed when you use a VA home loan program to purchase a home, but not when using a VA streamline refinance. Basically, since you already have a VA loan, most lenders will request a validation in lieu of a COE.
Q: Can I add or remove someone from the mortgage with a VA Streamline?
A: Yes and no, in some cases parties can be added or removed. The rule of thumb is, that the veteran who was eligible for the original loan must remain on the loan. The only exception to this is when a spouse and veteran are on the existing loan and the veteran passes away. In this case, the surviving spouse may be eligible to refinance with a VA streamline.
Q: What if using the VA streamline refinance raises my payment?
A: The payment could increase in some cases, however it’s very rare that it will raise higher than 25%. Your lender could request your income documentation, but the payment should not raise that high because of the following factors;
- ARM to Fixed Rate-Because a fixed rate mortgage will usually have higher interest rates than an adjustable rate mortgage also known as ARMs, your payment may raise. In some cases, your rate and payment could possibly go down if your ARM interest rate is higher than today’s lower fixed rates.
- Shorter Terms-The VA streamline refinance allows a borrower to refinance from a 30 year loan into a shorter term loan. In this case, it’s OK for your payment to go up as long as your interest rate goes down. Since shorter term loans are meant to be paid off faster, payments are usually bigger than loans with longer terms.
- Energy Efficient Improvements-Another benefit to the VA streamline refinance program is, it allows home owners to finance up to six grand to put towards energy efficient improvements and upgrades to their home. Examples of energy efficient improvements are; programmable thermostats, solar heating, and caulking or weather stripping. Sometimes, you may receive cash at closing of a VA streamline instead of energy-efficient items. Check with your lender for details.
Q: What if I have a Second mortgage?
A: Second mortgages on VA loans are usually pretty rare, since a VA loan doesn’t require a down payment, which means there’s not enough equity that exists to be able to obtain a second mortgage.
Q: What if my question wasn’t found below or I have more questions regarding VA Home Loans and VA Streamline Refinancing?
A: Click the link below and within minutes you’ll be matching with a qualified VA-Approved lending specialist who will be more than happy to assist you and answer any questions you may have. Click the link below to get started.
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