What Is the Funding Fee for a VA Streamline Refinance?
What Is a VA Streamline Refinance?
A VA Streamline Refinance (also known as an Interest Rate Reduction Refinance Loan, or IRRRL) is a loan option available to homeowners with existing VA loans. The VA Streamline Refinance allows homeowners to refinance their existing VA loan into a new loan with a lower interest rate and potentially lower monthly payment. This type of loan does not require the borrower to provide documentation of income or credit scores, making it a popular choice for many homeowners.
What Is the Funding Fee for a VA Streamline Refinance?
The VA Streamline Refinance does require a funding fee, which is a one-time up-front fee charged by the lender to cover the costs of originating the loan. The funding fee is typically a percentage of the loan amount, and is based on the type of loan the borrower is taking out. For a VA Streamline Refinance, the funding fee is 0.5% of the loan amount.
The funding fee can be paid in cash at closing, or can be included in the loan amount to be paid over time. The funding fee is waived for certain disabled veterans, and may be reduced for veterans who are eligible for disability compensation.
What Are the Other Costs of a VA Streamline Refinance?
In addition to the funding fee, there are other costs associated with a VA Streamline Refinance. These costs include the appraisal fee, title insurance, and closing costs. The appraisal fee is typically a flat fee, and is paid at closing. The title insurance fee and closing costs vary depending on the lender, but can typically range from $500 to $1,500.
Conclusion
A VA Streamline Refinance is a great option for homeowners with existing VA loans who want to lower their interest rate and monthly payment. The loan does require a funding fee of 0.5% of the loan amount, as well as other costs such as the appraisal fee, title insurance, and closing costs. These costs can be paid in cash at closing, or can be included in the loan amount to be paid over time.