topic Considering IRRRL in Mortgage Loans

Considering IRRRL

joe867 — Thu, 31 Jan 2013 03:41:15 GMT

I purchased my home 13 months ago. My mortgage balance in 158k on a 30 yr VA @ 4.375%. Monthly $806 to P/I and $340 to escrow. EX from psecu 743 1/13. 50k salary.

I'm considering a IRRRL and switching to a 15yr VA loan. What are rates like? Currently the mortgage is held by Wells Fargo but I just joined NFCU and I'm also open to other options.

Since the purchase I have paid off the last of my student loans and my car, freeing up $435 a month.

What costs can I expect? I plan on living in the house for another 10 years so I think this would be a good move.

Would this be a good move? Is more info needed.

Thanks in advance.

Re: Considering IRRRL

joe867 — Thu, 31 Jan 2013 04:23:50 GMT

I should also add that my last app was this month. How long should I wait to refi?

Re: Considering IRRRL

Anonymous — Thu, 31 Jan 2013 14:34:40 GMT

Applying for new credit does not always have any impact. As long as you disclose that you were approved and accepted the terms if its not reporting on your credit reports as of yet.

Which ever lender you choose or broker can give you the break down of any cost involved and how the process goes.

Re: Considering IRRRL

Anonymous — Thu, 31 Jan 2013 21:56:35 GMT

@joe867 - I am just now completing an IRRL on a VA loan with NFCU. I did mine on a new 30 year and got 3.0% with a 1/4 point buy down. I started the process in late October and at that time NFCU had the most competitive interest rates in comparison to USAA and a couple other national brokers who were sending me mailers. I think you may get a slightly better rate on a 15 year from what I got on 30. NFCU charged a 1% origination fee and VA charged a 1% administration fee same as the original note. The other escrow and title fees I'm sure vary by region. I was allowed to select my own escrow and title company if I wanted to..

My original loan was with USAA at 4.25% from 01/11. I used the same escrow and title company as the original mortgage. The process had a couple of hiccups at the title company and of course the holidays in November and December otherwise it would have / should have closed in 45 - 60 days. My NFCU loan officer was amazing and communicated regularly. My total closing costs on a 220K loan were about $6800 and we rolled it all in. My finance gal said the break even is about five years and then I save a boatload especially if I keep making the old payment amount. I'm in SoCal so I don't know how your closing costs would compare but hope some of this info helps.

Edit to add: Part of the IRRL is no credit check / requirements. NFCU did pull a tri-merge credit report but I did not need any LOE's for underwriting. In fact there was minimal documentation on my end. The usual request for tax transcripts, letter to check for government debt, VA eligibility, etc. but no current paystubs or "Hey what's this inquiry". My credit is not unblemished but there was no new derogatory info since my original mortgage.

Re: Considering IRRRL

DallasLoanGuy — Fri, 01 Feb 2013 15:31:08 GMT

you cant change the term on an irrrl

you will be doing a full refi

edited to add..... that is, if the payment goes up

Re: Considering IRRRL

joe867 — Fri, 01 Feb 2013 16:24:30 GMT

@DallasLoanGuy What you have stated is not true. You can change the terms with an IRRRL even if the payments go up. The last paragraph of this link actually provides a warning (about higher payments) to those who want to do this. http://www.benefits.va.gov/HOMELOANS/irrrl.asp

Re: Considering IRRRL

DallasLoanGuy — Fri, 01 Feb 2013 19:23:49 GMT

@joe867 wrote:
@DallasLoanGuy What you have stated is not true. You can change the terms with an IRRRL even if the payments go up. The last paragraph of this link actually provides a warning (about higher payments) to those who want to do this. http://www.benefits.va.gov/HOMELOANS/irrrl.asp

and when the payment goes up by a certain amount (20% i think) the lender will want to determine whether you can make the payment. regardless of what va says.

so a non qualifying irrrl would then become a full credit qualifying irrrl

i guess the above can vary by lender. but i know a handful of them that require the loan be a credit qualifying event instead of the streamline nature of the irrrl when the payment goes up.... and it almost always does when changing from 30 to 15yr.

reading va guidelines is cool. but the lender has their own guidelines.

Re: Considering IRRRL

joe867 — Fri, 01 Feb 2013 20:46:00 GMT

As "cool" as it might be to read VA guidelines I still stand by the my statement that what you said is not true. A soft pull of my credit, proof of the 10% more income I have now compared to when it opened, and a quick recalc of debt to income should be more than enough to answer any questions.

Intended or not your reply came across as condescending and it was not appreciated.

Re: Considering IRRRL

DallasLoanGuy — Fri, 01 Feb 2013 23:02:29 GMT

my replies are not appreciated?

ok. apparantly you only wanted to know va guidelines and NOT any of the "Lender Guideline Overlays" <= i assumed otherwise. my bad. sorry about that.

and lenders dont do soft pulls.

good luck!!!!

Re: Considering IRRRL

joe867 — Sat, 02 Feb 2013 02:16:08 GMT

I never said your reply isn't appreciated. I will say you condescending tone most certainly is not. This community has been very friendly and provided a lot of information to me so far. The manner in which your last two posts have been delivered is doing no favor to this community. I'm just an informed consumer looking to gain more knowledge. I fully understand that every lender has its own policy but I also understand that nowhere in the VA documentation does it say that an IRRRL cannot be used to change the terms to a 15 year mortgage and raise monthly payments. You also claim that a lender does not do a soft pull. I know that may be true if you do not already have an account with the lender but the same is not necessarily true when you are an existing customer. You may not do it but it is done.

Re: Considering IRRRL

llecs — Sat, 02 Feb 2013 07:31:14 GMT

Kind reminder to be friendly, supportive, and respectful.

I have zero experience in refis, though I need to do one soon. I know from experience in our recent home purchase a couple of years ago that most of what I read out there on websites, blogs, and even forums like myFICO was partially incorrect. You're never going to have perfect fluidity in info because there are different experiences whether it be the lender or the buyer. I learned that the best approach to mortgage loans, CCs or whatever credit process we're going through is to assume the info is correct so that there are no last-second surprises if the info was indeed wrong. Trust but verify through your own experience.

Re: Considering IRRRL

DallasLoanGuy — Tue, 05 Feb 2013 22:54:53 GMT

@llecs wrote:
Kind reminder to be friendly, supportive, and respectful.

i am not offended at all. and felt no disrespect.

it happens.

my answers are usually pretty short(see my signature). and i cant help it if someone took one of my 4800 helpful posts on myfico as condecending.... but people will read what they want to into my replies....

i have been answering questions on boards like this for YEARS..... i don't always answer just the question, but also interject potential pitfalls that may result. as in this case(va guidelines and lender guideline overlays).... MOST people dont know what lender guideline overlays are.