VA Refinance Calculator
VA IRRRL Definitions
Principal
The portion of your monthly payment that applies to and reduces your loan balance is called principal.
Interest
Interest accrues on your loan every day. When you make a payment, the interest that has accumulated since your last payment is paid first, bringing your accrued interest balance to zero.
VA Funding Fee
While VA loans do not impose monthly or annual mortgage insurance, there is typically a funding fee that is added to the base VA loan amount at inception. The funding fee is determined by eligibility status, down payment, the purpose of the loan (purchase or refinance).
Subsequent Use
If this is not the first time you’ve used your VA loan eligibility, your new VA loan will be considered subsequent use when determining the applicable funding fee.
The VA funding fee can be waived in certain circumstances.
Escrow/Impound
Property Taxes
VA lenders may require that you pay your property taxes every year through your lender. The lender will divide the annual property tax amount by 12 and include it in your monthly house payment.
Homeowners Insurance
Similarly to property taxes, your lender will likely pay your homeowners insurance annually. This premium is divided by 12 and added to your monthly payment.
Since these payments are made annually (sometimes semi-annually or quarterly), your lender will hold the funds in an account called an escrow or impound account. The lender then pays from this account when the bills are due.
About our VA Refinance Calculator
If your current mortgage is a VA loan, you may be eligible to lower your rate, lower your payment, or shorten your loan term with a streamlined VA loan refinance. AKA: VA IRRRL
In many cases lenders will not require an appraisal or income verification. This makes refinancing possible even if you owe more than your home is worth.
VA Refinance Process
Each VA lender is different, but most will ask you to provide copies of the following:
- Current Mortgage Statement
- Homeowners Insurance Declarations Page
- Mortgage Note from Current VA Loan (found in the papers you received at closing)
- HUD/Settlement Statement from Current VA Loan (found in the papers you received at closing)
The process is generally much easier than traditional refinances.
What is a VA Interest Rate Reduction Refinance Loan (IRRRL)?
VA IRRRL (Interest Rate Reduction Refinance Loan) is a streamlined VA refinance allowing those with VA loans to refinance to a new VA loan with better terms. In many cases no income verification and no appraisal are necessary.
Can you get cash back on a VA IRRRL?
VA IRRRL loans are only available to change the rate and/or term of your current VA loan, so you cannot get cash back using your home’s equity. If you are looking to receive cash back or if your current loan is something other than VA (FHA, USDA, conventional), then your new VA loan will be considered a cash-out refinance.