IRRRL is the best option if you currently have a home loan with a VA guarantee and wish to lower your monthly mortgage payments.
You can replace your current loan with a new one with alternative conditions using a VA-backed cash-out refinance loan.
You need to already have a VA mortgage to refinance into an IRRRL.
If you're not refinancing out of a VA loan with an adjustable rate, the rate on your new loan must also be lower.
An IRRRL has a 0.5% funding fee added to the loan amount.
Unless it's not your first VA loan, the fee for a VA cash-out refinance is 2.3% of the total loan amount.
The funding charge for subsequent VA loans is 3.6%.
VA loans don't need mortgage insurance, unlike conventional and FHA loans.
Some lenders may need a minimum credit score, minimum income, and an assessment during the previous 12 months for VA streamline refinancing.
The typical debt-to-income ratio is 41% or less, although lenders will accept ratios up to 56%.