Popular among VA mortgage lenders is the VA Streamline Refinance. The VA streamline refinance program in its purest sense is a great program for those who already have a VA loan because it doesn’t require an appraisal or a credit underwriting package. However, with the current state of declining home values across most of the US in 2011, many of the approved VA lenders are requiring appraisals and credit information.
Now let’s look at some other aspects of this loan program to see if it is right for you.
In just about every case, you can only use the VA streamline loan if you are lowering your current mortgage interest rate. Only in the case that you are going from a VA adjustable rate mortgage to a fixed rate will the VA allow you to increase your interest rate.
Unlike the case when you got your first VA loan, you do not have to live in the property to get a VA streamline refinance.
Your new loan amount may not exceed your existing Va loan balance, except for allowable fees and closing costs, the funding fee, and up to 2 points. You may also add to your new balance up to $6,000 for qualified and approved energy efficiency upgrades to your home.
You cannot use the streamline refinance for a cash back or cash out loan. You may only use it to refinance your current first mortgage balance. This means that if you have a second mortgage you cannot use the VA streamline refinance program to pay it off.
Any VA lender who offers VA loans may offer you a VA streamline refinance. This also means that you do not have to do your refinance with your current lender. Rather you will have to do your VA streamline refinance with another approved VA lender.
Hopefully some of these tips and suggestions shed some light on this very important loan program for those homeowners who have VA loans and want to refinance.