Buying a house can be one of the top priority items in wish list of most of the people. However, with the property prices touching sky, getting them is no easy task. For the Veterans and those who have served the US Armed forces, there are assistance available in the form of the VA or the Veteran Affairs home loans which are backed by the US Department of Veteran Affairs( VA). This allows the military personnel to avail a number of benefits on the loans they take and the refinancing options they select. Apart from the lower interest rates and the low- to -no down payment under these loans. one has the privilege of getting the loans without the rigorous credit checks run by the lenders.
If you are looking to for the VA refinance option there are certain aspects which you need to be aware of. Under the provision, the borrowers are allowed change in the terms of the loan, the total debt remaining the same. One can avail the VA streamline refinance program which can offer them hoards of benefits.
Reduced Interest Rate:
The interest rates depend a lot on the market conditions. The borrowers are often left researching and speculating the right time to get the personal installment loans, the time which can get them the best of the interest rates. A lot of borrowers are seen to wait for the market to bottom out the interest rate and then take a loan. However, this might not be feasible when you require the money urgently and cannot wait for the markets to bottom out. However, the veterans can get a refinancing deal much easily and at affordable rate of interest.
Reduced Refinancing Cost:
Under the normal course if you go for a refinancing deal, you will be required to pay additional fees which will include the payments towards the fees. This amounts to around 3-6% of the loan amount and can be a heavy amount for the borrowers who are low on finances. However, if one goes for the veteran refinancing streamline loan , the interest rates and the fees are reduced considerably.
When one goes for the refinancing decision in the normal course, they will be required to provide a lot of documentation to the lenders. However, in case of the Veteran applicant going for a VA refinancing deal, all that is looked at by the lenders if Certificate of eligibility. Since the documentation is already there, the borrowers are in no ways required to provide any new documentation to the lenders. However, in case the veterans have suffered any losses in their income or any other obligations or debts added to their portfolio while they go for the refinancing option, they will be required to offer just the document confirming the recent changes.
Change in Type of Interest:
Any mortgage loan is available under two interest rate regime – the variable rate of interest and the fixed rate of interest. If you are up for getting your VA mortgage loan refinanced under the IRRRL plan, you have the flexibility of selecting any of the interest rate plans- fixed or variable. However, going for a refinance makes a lot of sense if your existing rate of interest and the new interest regime has a difference of no less than 1%.
Under the IRRRL plan, the interest provisions are a bit different from the normal refinance system. In fact here you are allowed to get your normal refinance plan converted to a VA streamline refinance.