Closing costs normally associated with an Interest Rate Reduction Refinance Loan (IRRRL)

Closing costs normally associated

with an Interest Rate Reduction

Refinance Loan (IRRRL)

 Origination Fee *

 Discount Points

 Prepaid Taxes and Hazard

Insurance

 Title Examination Fee

 Title Insurance Fee

 Flood Zone Determination

 Environmental Endorsements

 Recording Fees

 Special Mailing Fees

(Example: Fed-Ex or Courier Fees)

 VA Funding Fee

*The loan origination fee is limited to

1% of the loan amount. The lender

may charge this flat fee or itemize the

following fees not to exceed 1%:

- Application and Processing Fees

- Document Preparation Fee

- Loan Closing or Settlement Fee

- Notary Fees

- Interest Rate Lock-In Fee

- Tax Service Fee

- Reconveyance Fees

- Commitment or Marketing Fees

- Trustee’s Fees or Charges

This is not an all exclusive list of fees

and charges. If you have any

questions concerning fees and

charges on a VA Loan, contact the

Phoenix Regional Loan Center.

Department of Veterans Affairs

VA Regional Loan Center

3333 North Central Avenue

Phoenix, AZ 85012

Toll-free number:

1-888-869-0194

Monday through Friday

7:30 a.m. to 4:00 p.m. MST

Phoenix RLC Website

www.vba.va.gov/ro/phoenixlgy/index.htm

National VA Loan Guaranty Website:

www.homeloans.va.gov

To contact the VA Eligibility Center

call 1-888-244-6711

Email: [email protected]

or write to:

VA Eligibility Center

P.O. Box 20729

Winston-Salem, NC 27120

To sign up for our new Email

Notification Service, logon to

http://mailman.listserve.com/

listmanager/listinfo/phoenixrlc

For more information on

other VA benefits call

1-800-827-1000

INTEREST RATE

REDUCTION

REFINANCE

LOANS

(IRRRLs)

April 2008

Note: Refinancing frequently or adding

all of these items into your loan, may

result in a situation in which you owe

more than the fair market value of the

house. This can reduce the benefit of

refinancing since your payment will not

be lowered as much as it could be.

Also, you could have difficulty selling

the house for enough to pay off your

loan balance.

*Veterans entitled to VA compensation

may be exempt from the Funding Fee.

What is an IRRRL?

IRRRL stands for Interest Rate

Reduction Refinancing Loan. You

may also see it referred to as a “VA

Streamline”. It is used to refinance an

existing VA guaranteed loan to reduce

the interest rate or to refinance an

adjustable rate mortgage (ARM) to a

fixed rate.

What are the requirements?

The loan you are refinancing must

have been guaranteed using your VA

entitlement. The new loan will re-use

the entitlement you originally used. A

Certificate of Eligibility is not required.

Your lender can verify your previous

loan information by using our

automated system.

No appraisal or credit underwriting is

required by VA. However, you should

be aware that some lenders may

require them anyway.

Also, the occupancy requirement is

different from other VA loans. When

you originally obtained your VA loan,

you certified that you occupied or

intended to occupy the home. For an

IRRRL, you only need to certify that

you previously occupied it.

What if I have a 2nd Mortgage?

No loan other than the existing VA

loan may be paid from the proceeds of

an IRRRL. If you have a 2

mortgage,

the holder must agree to subordinate

that lien so that your new VA loan will

be a first mortgage.

Can I take cash out if I have equity

in the property?

No, you must not receive any cash

from the loan proceeds. The new loan

amount may not exceed the sum of the

outstanding balance on the existing VA

loan, plus allowable fees and closing

costs. You may also add up to $6,000

of energy efficient improvements into

the loan. See your lender for details.

How much will this cost?

An IRRRL may be done with “no

money out of pocket” by including all

costs into the new loan. Some lenders

may say that VA requires certain

closing costs to be charged and

included in the loan. The only cost

required by VA is a funding fee* of ½ %

of the new loan amount. This may be

paid in cash at closing or added to the

new loan.

In addition to the energy efficient

improvements, you may also include

up to 2 discount points into the loan.

I received a letter in the mail about a

“special” refinance program for

veterans. Is this the same

program?

VETERANS ARE STRONGLY

URGED TO CONTACT SEVERAL

LENDERS WHEN CONSIDERING AN

IRRRL. THERE MAY BE BIG

DIFFERENCES IN THE TERMS

OFFERED BY THE VARIOUS

LENDERS YOU CONTACT.

Some lenders may contact you

suggesting that they are the only lender

with the authority to make IRRRLs. This

is not so. Any lender of your choice may

process your application for an IRRRL.

While it may be the best place to start

shopping for an IRRRL, you do not have

to go to the lender you make your

payments to now or to the lender from

whom you originally obtained you loan.