Anyone ever done an IRRRL on a VA backed loan? Good bad and ugly experiences? Anything to be cautious of?

SSG Private RallyPoint Member — Mon, 04 May 2020 20:36:19 -0400

I recently purchased a home 8-9 months ago and I’m already getting bombed with offers to refinance. It seems odd and I’m skeptical of the offer that’s to good to be true. Is there anything I should look for or is this a steer clear situation all the way?

Response by SSgt Private RallyPoint Member made May 4 at 2020 8:41 PM

SSgt Private RallyPoint Member — Mon, 04 May 2020 20:41:35 -0400

I'D suggest being very careful, if you currently have a 30 year mortgage you have not even begun to pay on the equity of the home you have mostly been paying interest. And unless you plan on changing the term of the loan you will be almost starting over with the new mortgage making what you have paid the last 8-9 months a loss.

Response by 1SG Thomas Jasak made May 4 at 2020 10:57 PM

1SG Thomas Jasak — Mon, 04 May 2020 22:57:51 -0400

Be very skeptical. I have owned 3 homes in the past with VA loans and have always been sent tons of mail on a weekly basis about financing.

Response by SFC Private RallyPoint Member made May 5 at 2020 2:44 AM

SFC Private RallyPoint Member — Tue, 05 May 2020 02:44:28 -0400

I'm doing one right now. My interest rate is decreasing 1.25%, and going to end up saving about 40k over the life of the loan along with a good decrease on my monthly payment.

Response by 1SG Private RallyPoint Member made May 5 at 2020 6:45 AM

1SG Private RallyPoint Member — Tue, 05 May 2020 06:45:22 -0400

Unless your interest rate is dropping 2% it would be unlikely that refinancing would he beneficial for you. This is because while you still see a small drop in monthly bill the cost of the refinance still cost more money.
I also have a VA and looked i to refinance after almost 4 years and it still wasnt worth it for me. I wasn't even trying to pull money out of my equity.

Response by SP5 George Santa made May 6 at 2020 6:40 PM

SP5 George Santa — Wed, 06 May 2020 18:40:17 -0400

good even my name is GEORGE SANTA I was discharged in oct 27 1968 from fort sill. I am new to all of this so I need help. How do I get help with my mortage. thank you and GOD BLESS

Response by CW3 Kelly Duncan made May 6 at 2020 6:45 PM

CW3 Kelly Duncan — Wed, 06 May 2020 18:45:24 -0400

Do not refinance unless you save at least 1% on the percentage. Also, try to only refinance for what you owe - don't take any cash out. If you itemize your taxes, the closing costs are tax-deductible. We just refinanced and used the sign method. Easy Peasy, and only took about 18 days.

Response by SSgt Gordon Kaylor made May 6 at 2020 7:29 PM

SSgt Gordon Kaylor — Wed, 06 May 2020 19:29:16 -0400

I am a Mortgage Loan Officer for a bank. I have used my VA benefit to purchase and refinance my VA loans.
Generally if you have had your mortgage for less than a year you will need to bring money to the table to do an IRRRL.
It makes sense IF you are saving enough money to offset the closing costs (not money out of pocket), actual closing costs. These are different.
Most of what you are getting in the mail are for ARM'S (adjustable rate mortgage) NOT fixed rates.
You will get your best mortgages from local community banks NOT mortgage brokers.
Good luck

Response by SSgt Gordon Kaylor made May 6 at 2020 7:41 PM

SSgt Gordon Kaylor — Wed, 06 May 2020 19:41:29 -0400

As I'm reading through some comments I have to say, many have no idea what they are talking about.
Whether you save 1% or 2% or .5% all comes down to your breakeven point between your closing costs, monthly savings and how long you plan on keeping your home.
My last VA refi was from 3.75% down to 3.25%, we were in our home 11 months when we locked in. We also knew that we had no intention of ever moving again. We've made our money back 3 times over already.
Better off getting advice from a financial professional that a bunch of people that think they know what's best with nothing to back it up their opinion.
Semper Fi

Response by LTC Fred Alderson made May 6 at 2020 9:12 PM

LTC Fred Alderson — Wed, 06 May 2020 21:12:09 -0400

I am doing one right now and it is pretty simple. But shop around. I got 2.75% w/no points & about $7000 in closing costs.

Response by Sgt I B made May 6 at 2020 9:27 PM

Sgt I B — Wed, 06 May 2020 21:27:30 -0400

Greetings,

I’m a Combat Vet and now I’m a Loan Officer and am also specialized in VA Lending. A VA IRRL is a streamline refinance that does not require an appraisal, asset verification, or credit check ( if refinancing with current servicer ). VA rates are lower than Conventional or FHA so for the most part you should get a reduction in rate. The most common knowledge most Vets lack is that if you’re not collecting VA Disability Compensation then you will be required to pay a VA Funding Fee. That fee can be wrapped on to the loan. It’s important to know how much your VA funding fee is since that is a HUGE determining factor on whether the refinance will benefit you. It all depends how long you are planning on staying in that home. Please make sure you will recoup the closing costs before you decide to sell the home or finish paying off your loan. There is so much more to know. Also, make sure that you explore Lenders that don’t charge origination fees on VA loans. Explore the big banks and not the local brokers.

Response by SSgt Holly Burwell made May 6 at 2020 9:32 PM

SSgt Holly Burwell — Wed, 06 May 2020 21:32:22 -0400

I finished my IRRRL with Roundpoint mortgage and they were legitimate. They let me skip one month, and didn't charge me all of the fees the other places were trying to charge.

Response by TSgt Mary Cummings made May 6 at 2020 10:04 PM

TSgt Mary Cummings — Wed, 06 May 2020 22:04:16 -0400

My daughter and son-in-law just did and they knocked of 4 1/2 years of their mortgage and 2 1/2% off their interest. Plus they don’t have to make a house payment for 2 months, it’s just the way the closing fell.

Response by 1SG Gary Smith made May 6 at 2020 10:23 PM

1SG Gary Smith — Wed, 06 May 2020 22:23:29 -0400

My advise is to not refinance and instead pay your mortgage every two weeks. This will get you ahead and you will have made an extra payment per year and cutting down your interest paid.

Response by PO3 Patrick Dunn made May 6 at 2020 10:31 PM

PO3 Patrick Dunn — Wed, 06 May 2020 22:31:44 -0400

Hello I’m a veteran and a licensed senior loan officer and I’m personally doing an IRRRL and they can be tricky but if the cost is low and the equity is there it would be worth it. I’m in San Diego and can do all of California but if anyone just needs free advise on them please feel free to email [login to see] or my cell is [login to see] . Feel free to reach out for free advice.

Response by PO2 Ron Bixby made May 6 at 2020 10:50 PM

PO2 Ron Bixby — Wed, 06 May 2020 22:50:10 -0400

I have a VA loan and refinanced with the IRRRL about 6 months ago. My loan was approximately 2 1/2 yrs old, so I was cautious too. My finance company did a great job walking me through everything and my monthly pmts went from $991/mo to $841/mo. I think it all depends on how well your finance company communicates with you. Good luck!

Response by SFC Jim McKinney made May 6 at 2020 10:58 PM

SFC Jim McKinney — Wed, 06 May 2020 22:58:04 -0400

I used Quicken Loans. Used my VA loan at 3.25 percent in 2016.
Just refinanced using it at 2.75
Easy peasy...

Response by CDR D W made May 6 at 2020 11:54 PM

CDR D W — Wed, 06 May 2020 23:54:10 -0400

The only thing to be cautious with is the company you choose. I just wrapped up IRRRL with Kentwood Mortgage out of Ohio. 2.79% for 30 years. Great company. Many others out there but I’ve not found anyone who can beat their rates. This is also called a VA streamlined loan. There is no appraisal required and some other normal closing activities don’t apply. Closing will still cost you a chunk but can be wrapped into the loan. If you’re dropping your rate significantly and staying in the house for years to come, you’ll end up saving in the long run. The difference between your current payment and new payment could be $100 for example. Multiply $100 times however many months or years you’ll be in the home and you’ve done your long term calculations. It’s not just about skipping a monthly payment and saving a few bucks. The long term savings is what matters. If you spend $5000 on closing costs and your saving $100 a month, how long will it take to recoup your $5000 and break even? 50 months! Technically that’s when you begin saving money and the new loan starts to pay you back. Another person replied and suggested making an extra mortgage payment each year. Very smart and effectively kills the original interest rate and you save a boat load of money over the life of the mortgage. Good luck!

Response by PO2 Richard Fraser made May 7 at 2020 12:54 AM

PO2 Richard Fraser — Thu, 07 May 2020 00:54:50 -0400

A VA IRRRL can be good depending on your long term plans with the home. I am a veteran and a Mortgage Loan Officer that can offer you guidance if you would like. There is so much more to determining whether or not. People get hung up on rate and fees, but from a financial planning viewpoint there is so much more to consider. If a lender only talks about rates and payments then find a different lender.

Response by PO2 Greg Donahoe made May 7 at 2020 7:18 AM

PO2 Greg Donahoe — Thu, 07 May 2020 07:18:52 -0400

I'd suggest contacting more than one loan offeror and call your current lender to see if they can offer one with a similar rate reduction. This should be less costly and close even more quickly. Since the loan originated just a little bit ago, there's really no downside to resetting to the original term. If that were not the case, I'd advise you to seek a reduction in the term for keeping the same payment unless a lower payment was your main motivation for doing this. I was able to shave a few years off of my term by doing this five years ago taking a shorter term in lieu of a lower payment. Best of luck with this process.

Response by PFC Robert Austin made May 7 at 2020 11:50 AM

PFC Robert Austin — Thu, 07 May 2020 11:50:57 -0400

My father (also a vet, with a vet financed loan) told me that he tells them he is financed through VA and they stop wasting their time.

Response by Marie Farrah made May 7 at 2020 12:45 PM

Marie Farrah — Thu, 07 May 2020 12:45:40 -0400

when I did my first Irrl my loan was sold to Penny Mac and they were horrible to do business with
The next time I did I ended up with Freedom Mortgage and they are excellent to do business with and they don't sell your mortgage

Response by SGT Herbert Bollum made May 7 at 2020 2:08 PM

SGT Herbert Bollum — Thu, 07 May 2020 14:08:21 -0400

Ignore most offers, they just want to get your money on refi paperwork.
I have done it and it can eat up a lot of money doing a refi.
If you have applied for / received VA comp rating be sure to get that on your paperwork as it means a lot of money saved too.

Response by SGT Dale Evans made May 8 at 2020 1:13 AM

SGT Dale Evans — Fri, 08 May 2020 01:13:19 -0400

I refinanced and things to watch out for are the promise to skip a payment. They actually figure that into the loan and get more money out of you. With the irrrl they are required to drop your loan by 1% minimum. You can pay a fee depending on loan amount, ours was $3,000 and that was added to our loan which for us was a good thing but if you can pay it up front. You really have to pay attention to the housing market. The fed just dropped rates a second time. We refinanced with the first drop and if we had waited we could've gotten a better rate. Our payments dropped $400 so we aren't that unhappy with our decision. If I remember correctly you can refinance every 6 or 8 months as long as you make your payments on time. Be careful with loan people because they try to tempt you with a really bad deal and make it sound good. Do the math and ask questions. If they're legitimate they will help you understand and won't push you to sign with comments like, the market is improving and they can raise the rates any time, I had a customer that waited to long and they lost out on a good rate. These people are like a used car salesman, they just can't be trusted.

Response by SGT Olivia Bentley made Jun 2 at 2020 5:47 PM

SGT Olivia Bentley — Tue, 02 Jun 2020 17:47:11 -0400

We dealt with the same thing after we purchased our home in NOv., 2014. Your mortgage company or bank, when they post this information at your local court house, it becomes public record. We received numerous offers also. We contacted our local bank, and they explained what happened. Just ignore them. Been there, done that.:-)

Response by SSgt Glenn Leboeuf made Nov 19 at 2020 8:27 PM

SSgt Glenn Leboeuf — Thu, 19 Nov 2020 20:27:25 -0500

I have though it was through USAA. I am leary about all the rest if u read they say not affiliated with veterans. USAA REFINANCE was streamline no fees and didn't have to go through another appraisal.

Response by SFC Private RallyPoint Member made Mar 23 at 2021 7:39 PM

SFC Private RallyPoint Member — Tue, 23 Mar 2021 19:39:24 -0400

I see a lot of posts about what percentage of reduction makes it worth it. There are many factors to this, and a good mortgage company will include every one of them to meet your goal, whether it be paying the home off sooner, paying less interest, reducing payments, etc. As a matter of fact it isn't even LEGAL to refinance you with IRRL unless you save at least .5% AND you've made at least 6 payments since you took out your last loan. That said, I've been wanting to stay with USAA but do the IRRL, and they pay the funding fee, but that does mean much to me as I have VA disability and it's waived anyway. But I don't want to switch to another mortgage company for ONE reason: I don't trust that they aren't going to sell my loan to a crappy loan company that screws over its customers in HORRIBLE ways. They claim they never receive payments, lose checks, all to get you foreclosed on or jack up your interest rate. When I bought the place, my mortgage company sold me to one of those operations. I switched to USAA as soon as I could. I might be paying more, but I have piece of mind knowing USAA isn't going to sell me out.

Response by SP6 Patrick Parker made Mar 25 at 2021 5:17 PM

SP6 Patrick Parker — Thu, 25 Mar 2021 17:17:26 -0400

Beware the fine print on refi offers, I get a ton of them and they will offer 1 and 2 % below the prime lending rate because they want u to pay them points( can mean thousands out of pocket) up front it's how they make their money

Response by Sgt Jeremiah McKenna made Mar 26 at 2021 12:34 PM

Sgt Jeremiah McKenna — Fri, 26 Mar 2021 12:34:26 -0400

being that you are only in this for 9 months, your VA loan has not yet seasoned. You will be bombarded with offers for the rest of your life. The banks don't know exactly how long you have had the loan, they only know you have one.

Once you have seasoned your loan:

On top of that, you have to weigh the amount of money you are going to save and compare that to the closing costs you will need to bring to the table. Meaning, if you have to bring $1,500 and your payment will be lowered by $50 a month, then I don't see it being that great of a deal. But if you are lowering the payment by $100, $150, $300, then that to me is a great deal.

You also have to make sure that when you spend that money on closing costs, are you financially secure after those funds have left the your account.

Get the book Bank on Yourself, it is a great read and I believe it should have been on every branch leaders mandatory reading list.