VA IRRL Interest Rate Reduction Loan
A VA Mortgage has another excellent feature in addition to its zero-down, no monthly mortgage insurance. They always have the option to be refinanced in a very simple way, with the IRRL mortgage, which stands for “interest rate reduction loan” (clever program title courtesy of the federal government).
The VA IRRL mortgage only requires that the loan being paid off is also a VA mortgage, and the new rate is of a significant enough improvement to benefit the veteran borrower. The borrower must prove ability to repay with normal income documentation, but there is no appraisal requirement.
The borrower must also prove that they have not made any late payments in the previous 12 months as well. There is also a reduced mortgage insurance/VA funding fee for this refinance loan.
