VA loans offer a wonderful mortgage feature called the VA Streamline Refinance. The VA Streamline is actually like it sounds – it is a streamline program that allows a Vet who has a VA mortgage to take advantage of low VA streamline rates with minimal paperwork to refinance.
Now, let’s get into the three key features and benefits of the VA Streamline Mortgage
First of all, the VA streamline mortgage requires that you have not missed mortgage payments over the past 12 months. If you have missed a payment and have a good reason why – you may be able to get an exception. Most likely you’ll have to had something happen that caused you to miss the payment that you can explain and that you have taken corrective action to fix such that it won’t happen again. Make sure you speak to your loan officer about your payment history if you have any questions.
Next, under perfect conditions, and per VA loan guidelines, you won’t need to get an appraisal on your property like you did when you purchased your home. While this can be good given the case where your home won’t appraise high enough to cover a loan amount large enough to payoff your mortgage – the VA would still do your loan. However, and this is where it gets a little stick in today’s weak housing market, many VA lenders are requiring an appraisal because of their investor requirements. There is no telling exactly which lenders are requiring an appraisal so you will have to pick up the phone to make some calls to different VA mortgage lenders. It is worth the effort.
The last feature we’re going to cover in this post is that you can get some payment relief with the VA streamline because it is possible to defer up to 2 payments before you have to make your first payment. You will also be in line to receive a refund on your current escrow account from the mortgage that is being paid off which could be up to nearly a full year’s worth of real estate taxes. Make sure you talk to your VA loan specialist about this feature if you want to use it. They won’t just set up the deferment unless you ask for it.
The bonus feature of this program is that as long as you have been making your mortgage payments on time, it is possible that you will not be asked to provide any income or credit report information. Again, the VA doesn’t specifically require this information for the streamline refinance, but the individual VA lenders may and some do. With this in mind, you will need to make some calls to different lenders if you have a concern about this to find out your best options.