Your Complete Guide to the VA Streamline Home Loan
- SECTION 1What is a VA STREAMLINE Loan?
- SECTION 2Am I Eligible for a VA STREAMLINE Loan?
- SECTION 3VA STREAMLINE Loan Benefits
- SECTION 4VA STREAMLINE Loan Rates
- SECTION 5First-Time Homebuyers
- SECTION 6VA STREAMLINE VA STREAMLINE Loans
- SECTION 7Refinancing with a VA STREAMLINE Loan
- SECTION 8Contract Guidelines
- SECTION 9The VA STREAMLINE Loan Process
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What is a VA Streamline Loan?
Video: The VA Streamline Loan Process
The VA will only allow you to take advantage of a VA Streamline refinance of your loan if the new terms provide you with an immediate financial benefit, such as a lower interest rate or a lower monthly payment. You can’t refinance your loan just because you don’t like your current lender or for any reason that doesn’t directly relate to your finances.
A VA Home loan is one that is through the U.S. Department of Veterans Affairs. U.S. Department of Veterans Affairs is a Federal Agency responsible for national policy and programs that address America's Housing needs for veterans, active service members, and spouses. The VA home loan program was created in 1944, part of the original Serviceman’s Readjustment Act, better known as the GI Bill of Rights. Signed into law by President Franklin D. and has helped millions of services members over the years.
VA home loans have been streamlined through the years to provide access to the mortgage market for veterans, service members and their spouses.
A VA home loan is a large sum of money lent to a borrower by a mortgage lender. VA home loans often have higher lending requirements but the benefits of meeting those requirements are returned with competitive rates and down payments assistance. When a prospective homeowner is ready to shop around for a mortgage, they will work with their Orbit Home Loan mortgage broker. This is a financial professional who brings together borrowers and lenders. They are not lenders and, as such, do not use their own funds to advance mortgage loans. Instead, they act as intermediaries, helping consumers comparison shop, bringing them a variety of quotes from different lenders at one time.
If you're ready to start your VA Streamline loan, check your eligibility or have specific questions on the VA Streamline loan, talk with a Orbit Home Loans specialist today.
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Loan Chart
How Do VA Streamline Loans Work?
VA home loans work like this: Your Orbit Home Loan mortgage broker (Mortgage Banker) works on your behalf to qualify you with the most competitive lenders in the nation. VA home mortgages are typically lent out with 15 or 30 year repayment periods; the one that’s right for you depends on your personal finances, your income, and the interest rate you can secure. Once you are qualified, completed the process and have purchased the property your lender will sell your loan to U.S. Department of Veterans Affairs, and they will now function as the servicer of your loan and will be responsible for collecting your payments. There is a possibility that your servicer may change so do not worry if that happens, it is normal. It is important to remember that your payments include your promise to pay back with interest.
Interest is the percentage rate you pay to for the trouble of the U.S. Department of Veterans Affairs lending you money. This is how the U.S. Department of Veterans Affairs makes money from having lent you such a large sum. Interest rates are either fixed or adjustable and interest rates normally adjust daily but can adjust multiple times a day. The interest rate you receive on a conventional loan will also vary based on your own personal financial profile.
Not sure what type of loan is right for you? Use the tool below to help you find out.
Exploring the VA Streamline Loan
VA Streamline Refinance Loan
A VA IRRRL is also referred to as a VA Streamline, and the terms are often used interchangeably. Lenders use the term “streamline” to imply that the IRRRL process is simpler and faster than other types of refinancing options.
VA Streamlines can help you switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, lower your monthly interest rate or change your term. You must have an existing VA loan to undergo a VA Streamline. If you wish to convert your home’s equity to cash, you must undergo a full refinance.
What are VA Streamline loan limits?
If you have remaining entitlement for your VA-backed home loan, find out the current loan limits and how they may affect the amount of money you can borrow without a down payment. As of 2020, if you have full entitlement, you don’t have a VA loan limit. VA home loan limits are the same as the Federal Housing Finance Agency (FHFA) limits. These are called conforming loan limits.
What is the VA Streamline funding fee?
The VA Streamline does not have a funding fee.
To calculate your VA Streamline Funding Fee, use Orbit Home Loans' Funding Fee Calculator here.
Is the VA Streamline Loan a Good Option?
A VA Streamline Refinance may not be worth it if you'll pay more in closing costs than you'll save. And it won't help you cash out your home equity. If you want to refinance with cash back — to pay for home improvements, for example — you'll need to use the VA cash-out refinance or another cash-out loan program.
How do I get a VA Streamline Loan?
Talk with a trusted lender that knows VA streamline loans and how to get the most from this hard-earned benefit. The process typically starts with getting preapproved, which can often be done in minutes using your phone, laptop, or tablet.
Loan preapproval is a key first step before making an offer on your dream home. Having that pre-approval letter gives you a clear sense of your buying power and shows sellers and listing agents you have what it takes to get to closing.
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If I’ve previously used a VA Streamline loan, can I use it again?
Yes, this is not a one-time option. Once you earn the VA Streamline loan benefit, it's yours for life. You can reuse the VA Streamline loan over and over again, and it's even possible to have more than one active VA STREAMLINE loan at the same time.
Continue to learn more about VA Streamline loan eligibility in our next section.