Question:

What is the VA mortgage payment reduction program and how do you qualify for it?

Answer:

The VA mortgage payment reduction program (also known as interest rate reduction loan or VA streamline refinance home loan) is a refinancing option that let's veterans refinance their existing mortgages with lower interest rates and hence lower payments.

Qualification for the VA Mortgage Payment Reduction Program

This VA mortgage payment reduction program is a government backed offer for active duty and prior service veterans. Therefore, it is only available to active duty military, surviving spouses, veterans and reservists.

Also, in order to be eligible for the program, the mortgage you are looking to refinance must be an existing VA home loan and the borrower cannot have made more than one 30-day late mortgage payment within the last 12 months.

Salient Features of the VA Mortgage Payment Reduction Program

  • No appraisal required
  • No credit qualifying required.
  • No Income documentation required.
  • No job verification.
  • No extra expense for refinancing because all prepaid and closing costs are rolled into the loan amount.
  • Borrower can skip up to 2 payments.
  • Existing escrow account is refunded.
  • Fast, convenient in-home closings.
  • Cash-out is not allowed on the VA streamline loan but up to $6000 in home improvement costs can be included in the loan amount.
  • The interest rate and monthly payments go down if the old and the new loans are both fixed rate. However, if going from a ARM to a fixed rate loan, the interest rate might go up.

The VA payment reduction program is a great boon for veterans. Low rate home mortgages are unheard of these days, more so for the credit-challenged. As the VA program is not affected by the performance of the rest of the market performance, it still offers low rate home mortgages because the interest rates are set by the government.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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