What makes the IRRRL different
IRRRL stands for Interest Rate Reduction Refinance Loan. It is a VA refinance built for one job: getting you into a better rate on the VA loan you already have.
- Usually no appraisal required by the VA. Your home’s value does not have to support a new appraisal.
- Lighter documentation. The VA does not require the full income and asset review a new purchase loan needs. Some lenders add their own requirements, which is why shopping lenders matters.
- No new Certificate of Eligibility needed.
- Reduced funding fee, and exempt if you receive VA disability compensation.
- You do not have to live there now. You must have lived in the home at some point, but it can be a rental today.
The rules that protect you
The VA requires that an IRRRL actually benefits you. In general:
- The new loan has to provide a real benefit, like a lower rate or moving from an ARM to a fixed rate.
- The closing costs have to be recouped through your monthly savings within 36 months.
- Your current loan needs some payment history. Typically at least six payments made and 210 days from your first payment due date.
Watch out for the mailers
If you have a VA loan, you have probably gotten letters that look official promising a huge drop in your payment. Some of those offers roll a lot of costs into your loan or reset your term in a way that costs you more over time. I will show you the full picture side by side, including how long it takes to break even, before you decide anything.
Want cash out instead?
The IRRRL does not let you take cash out. If you want to pull equity for a remodel, debt payoff or anything else, a VA cash-out refinance is the tool for that.
Common questions
Can I do an IRRRL if I am behind on payments?
Generally your mortgage needs to be current with a recent clean payment history. If you have had a late payment, reach out anyway and I will tell you where you stand.
Can I roll my closing costs into the new loan?
Yes, closing costs and the funding fee can usually be included in the new loan amount, as long as the loan still meets the VA's recoupment rules.
How long does an IRRRL take?
Because there is usually no appraisal and less paperwork, IRRRLs tend to close faster than a typical refinance. Timing depends on the lender and your current servicer.
Do I have to use my current lender?
No. You can refinance with any VA lender. As a broker I compare offers across many lenders so you are not stuck with whatever your current servicer quotes.
All loans subject to credit approval, property eligibility, and underwriting guidelines. Not all borrowers will qualify. Program terms and availability can change without notice. This is not a commitment to lend.