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Home Ownership Preparation :: VA Loan Rate
VA Loan Rate:
The Loan Rate Available from VA
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VA loan rate refers to the loans for Veterans known by the acronym IRRRL or Interest Rate Reduction Refinancing Loan.
Other lenders may also refer to it as “Streamlined” loans or “VA” loans. The bottom line is these loans will generally result in a lower interest loan for the person that is getting the loan.
Special Features of the VA Loan Rate
There is generally no appraisal or underwriting fee, which significantly helps reduce the overall cost of this type of loan and makes it more affordable for the person who is getting the loan.
That said, a credit report may still be required by the lending institution.
These types of loans can usually also be handled with little or no out of pocket expenses which make them very attractive for the homeowner with a limited amount of disposable income.
However, keep in mind that lenders are not required by law to offer this type of loan though many do handle them and ANY lender may process an IRRRL loan for you.
That said, you’re advised to check out several lenders because there could potentially be a LARGE difference in the terms between the lenders.
Also, another upside of this type of loan is that you do NOT have to occupy the residence as you do in a regular VA loan. You only need to certify that you previously occupied it.
Downsides of the VA Interest Rate Reduction Loans
One huge disadvantage to a lot of people about an IRRRL loan is that they can get no cash back from the proceeds as you may get in a conventional mortgage loan.
You also need to get a certificate of eligibility to take with you to the lender to make things easier. The process will go much faster.
Finally, keep in mind that the loan may not exceed the outstanding balance including any additional fees and closing costs.
All of this can easily result in being in a situation where you actually owe more on the residence than the fair market value and consequently get into a negative equity scenario where you cannot possibly sell the house for even as much as you owe on it.
The IRRRL Isn’t For Everyone
The IRRRL loan can be a great deal for you if you take the time to research it and know the plus and minus features.
Before you refinance, take time to figure out where you are and where you intend to be in the next fifteen to thirty years.
You should take into account the value of the property and look at projections as to where value in that area is headed.
From that you can make an informed decision as to whether the benefits outweigh the risks and whether you will be better off using it as opposed to a conventional term loan.
You also want to check the current VA loan rate to see if refinancing is a good idea right now.
A good mortgage accompany can help you look at and compare the options and guide you towards the best path for your financial future.
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Home-Ownership-Preparation.com :: VA Loan Rate