History
In the early 1980's, the government launched a new refinancei program called VA Streamline Mortgages. This program allows anyone with a VA loan to lower their rates at any time to the lowest rates then available, without added paperwork or crediti checks thus allowing people the opportunity to lower their mortgagei payments and save thousands of dollars in interesti.
The term "streamline" refers to the limited amount of documentation and underwritingi that needs to be performed by the lender. The majority of this paperwork is already completed and only needs to be resubmitted to qualify for the refinance, which in essence "streamlines" the refinance process.
What are the requirements?
The main requirement of VA streamline refinancing is that you can't have any payments over 30 days late in the last 12 months.
Is there anything else I need to know about refinancing a VA loan?
As with all loans, there are a few things that you can and can't do with a VA Streamline. If you currently have a 15 year VA loan, you can refinance to a 15 or a 30 year loan. However, the rate on the new loan must be lower or equal to the rate on the existing loan. Also, the streamline refinance does not have a cash out option.
: Frequently Asked Questions
How long does a VA Streamline Program typically take?
Like most loans, the typical VA streamline mortgage takes between
25 to 45 days to complete
"What is the interest ratei"?
VA Streamline rates vary on a daily basis depending on the Treasury
Bondi Market.
"What should I expect from the government VA streamline
refinance program"?
"How do I qualify for VA Streamline refinancing"?
- No 30 day late mortgage payments in the last twelve (12) months.
- No open judgments or liens against the property, or the borroweri.
- Second mortgages or Home Equityi Loans must be subordinated.
- Cannot currently be in Bankruptcyi. (Prior bankruptcy must be
discharged).
"What items will I need to complete a Streamline application"?
- Copy of Social Securityi Cards for all borrowers.
- Notei from current mortgage
- HUDi-1i Settlement Statementi from previous closingi.
- Homeowners Insuranceii Declaration Pages
- Titlei Insurancei Policy schedules A & B (not needed in Maryland
or Colorado) - Surveyi (In Ohio and Florida only).
- Buy Down Agreement & Schedule (if buy-down mortgage)
"What happens after my Streamline application is received"?
You will receive one (1) or two (2) Good Faith Estimates, one
from your lender. You can disregard fees on Lender Good Faith Estimate
(except for a VA funding fee if a VA loan); these are for illustration
purposes only. In most Cases the CUSTOMER DOES NOT PAY CLOSING COSTSi.
(only VA funding fee if applicable) "Cash from Borrower"
reflects the total of your current mortgage payment, plus the estimated
escrowi amount needed to start your new account which will be refunded
to you from your current bank within 30 days of closing. You will
be contacted to set an exact closing date and time that is convenient.
Remember, you are not paying any closing costs, and your lender
will not add anything to your loan amounti. In addition, you always
have a 3 day right-of-rescissioni (cancellation).
"What happens at the closing"?
Both Borrower and C0-Borrower need to bring in two (2) forms
of I.D. You must bring in two (2) checks. (VA may vary). One check
in the amount of the mortgage payment that is due to the current
lender that month. The second check, post dated for thirty days,
is for the establishment of a new escrow accounti. (You will receive
a rebate check from your current bank usually covering the entire
amount).
