Refinancing VA Loans May Further Reduce Mortgage Payments

The Federal Savings Bank points that markets are giving an opportunity to refinance mortgages now due to low interest rates. Even veterans who already benefit from VA loans can participate in refinancing

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VA and FHA home loans at The Federal Savings Bank

The Federal Savings Bank

On a $200,000 loan, that translates into saving about $3,600 in interest during the next 12 months

Chicago, IL (PRWEB) February 08, 2013

The Federal Savings bank has found that veterans who have a VA loan may benefit from an Interest Rate Reduction Refinance Loan (IRRRL). The loan may allow the interest rate to be reduced when an existing VA home loan is refinanced. Once an IRRRL is administered, the monthly mortgage payment should decrease. Those who are thinking or looking at refinancing should seriously consider this opportunity as interest rates very low at the moment.

Those veterans who directly vulnerable to interest rate fluctuation in adjustable rate mortgages may refinance into a fixed mortgage rate. However, the refinanced loan can only be made on a property that used a VA loan to purchase the home. When applying for an IRRRL, no appraisal or credit underwriting package is required, and no money out-of-pocket is needed. Further, neither a certificate of Eligibility is not required when applying for an IRRRL, and the applicant only needs to certify previous occupation of the home for which the applicant is seeking an IRRRL for.

Homeowners across the country are seeing positive results from refinancing. "On average, borrowers who refinanced reduced their interest rate by about 1.8 percentage points," said Frank Nothaft, vice president and chief economist at Freddie Mac. "On a $200,000 loan, that translates into saving about $3,600 in interest during the next 12 months.

As stated, the average interest rate reduction reported was about 1.8 percentage points, saving homeowners about 33 percent on their interest rates, resulting in the largest percent reduction recorded in the 27 years of refinancing analysis. Due to these low interest rates, The Federal Savings Bank encourages current VA lien holders explore refinance opportunities.