VA Streamline Refinance

VA Mortgage Loan Program

I may be biased regarding the VA Loan Program administered through the Department of Veteran Affairs but hands down I believe it to be the best residential Mortgage Loan opportunity.  There are many benefits to a VA Mortgage Loan however this loan program is limited only to a member or veteran of the United States military and the borrower must present a Certificate of Eligibility from the Department of Veteran Affairs. There are many benefits to a VA Loan, to name a few there is no down payment requirement, closing costs can be paid up to 4% with sellers concessions and  the loan is guaranteed through the VA making the VA Loan mortgage  attractive to the lender.  To be clear the Veterans Administration does not loan the money, they insure the loan issued through a VA approved lender.

VA Streamline Refinance – How to qualify ?

If you are a Veteran and used your Veterans Loan Eligibility to purchase your current residence a few years ago you qualify for a VA Streamline Refinance Mortgage.  There are as many benefits to a VA Streamline Refinance as there were for a new VA Loan when you first purchased the home.  There is no appraisal required, there is no credit scores required and if that isn’t good enough there is no income verification required, although you must be currently full-time employed.  A VA Loan Mortgage owner is also a homeowner that probably purchased when the interest rates were higher.  In 2005 interest rates dropped to 5% for the first time in more than 25 years and currently much lower than 5% often dipping below 4%.  Is it a good time to refinance at a much lower rate?  Allow me to give you an example:

Current Mortgage                       VA Streamline Mortgage Refinance:

Loan amount                                  $200,000                                      $200,000

Interest rate                                            4.75 %                                              3.75%

Principle % Interest Payment        $1043.29                                          $926.23

The difference in monthly obligation is $117.06 every month.   Many homeowners currently have a higher interest rate and can benefit by seeing an immediate monthly payment reduction.  The dollar savings in avoiding interest paid is in the thousands of dollars over the term of their VA Loan. There is no credit score minimum required because their is no credit scores required to qualify for a VA Streamline Refinance Mortgage.  You can have recent derogatory credit, recent late payments for credit and still qualify for a VA Streamline Refinance Mortgage.  However YOU CANNOT have late mortgage payments.  To qualify for a VA Streamline Refinance Mortgage you need to have made your mortgage payments timely with no late payments for the last 12 months on your current VA Mortgage Loan. One late mortgage payment may be allowed if the homeowner has had valid extenuating circumstances but this can be left to the lender to decide an only one month, not two or more, and even one late will possibly kill a VA Streamline Refinance Mortgage.

Debt to Income Ratio- No problem !

A VA Streamline Refinance Mortgage Loan does not require a new appraisal, another dollars out of pocket avoidance.  There is no income verification required, therefore debt to income ratios requirements will never be an issue.  The homeowner/borrower does need to have full time employment but income verification is not required.  Many times life takes over and I have witnessed a car payment keep someone from a New home.  It makes sense, a borrower needs a car to get to and from work and take the kids to school but sometimes the payment will put them over the Debt to income ratio but in this instance this would not be the issue.

What about a Cash Out Refinance?

Many former Veterans may have a VA Certificate of eligibility and have not used their VA Loan benefit and do not have a current VA Mortgage Loan.  A veteran may have a conventional loan or even a FHA Mortgage Loan.  You can do a cash out refinance mortgage loan on your current mortgage via a VA refinance mortgage.  Provided you have a Certificate of VA eligibility from the Department of Veterans Affairs you can cash out up to 100% loan to value with a VA Loan.  VA allows a rate and term VA Streamline Refinance but a VA Appraisal would be required, income verification is required and credit scores wold all be required on all cash out VA Mortgage Loan Refinances. The Larry Stepp Team at Gustan Cho Associates is available 7 days a week, holidays and weekends to guide you through the process.  We are committed to serving your best interest.


Larry Stepp     407-922-4755