Utah VA Streamline Refinance (IRRRL)

Last Updated: February 14, 2025

What is a Utah VA Streamline (IRRRL) Refinance?

The Utah VA Streamline Refinance provides current VA mortgage holders with a simple, efficient way of reducing their interest rates when market conditions allow it.

The technical name for it is the VA Interest Rate Reduction Refinance Loan – IRRRL in short. It’s essentially the process of paying off your old VA loan, and replacing it with a new VA mortgage that has more favorable terms. With some exceptions, VA streamline refinances don’t require a new appraisal, or any income documentation. Most lenders will require a minimum 580 credit score.

Income and credit will only need be verified on a VA Streamline Refinance if:

  • the housing payment is increasing by 20% or more by doing the refinance (such as in the process of switching from a 30 year loan term to a 15 year loan term)
  • a co-signer is being removed from the original VA mortgage

This is called a “credit qualifying VA Streamline Refinance”.

Who is eligible for a Utah VA Streamline (IRRRL) Refinance?

1. Only veterans that currently have a VA mortgage loan on their property are eligible to do a VA Streamline Refinance.

2. The veteran must certify that he or she previously occupied the property as his or her primary residence. In the case of active duty veterans who cannot personally occupy the dwelling, occupancy by the spouse or their dependent child can satisfy this requirement.

3. The most recent 12 months of on time mortgage payments must be documented. If the existing VA mortgage has been opened for less than 12 months, then VA “loan seasoning” requirements apply. The new Note date (the date on which you sign closing documents on your refinance) must be on or after the later of:

  • 210 days after the date on which the first monthly payment was due on the mortgage being refinanced, and
  • The date on which 6 full monthly payments have been made on the mortgage being refinanced

4. You may not use a VA Streamline refinance to take cash out. The only cash back allowed to a borrower is an incidental $500 or less.

5. If there is a second mortgage on the property (such as a home equity line of credit or home equity loan), the servicer of the second mortgage will need to agree to subordinate their lien so it’s in second position to the new VA mortgage. This is usually a simple process your mortgage loan officer can help guide you through, unless your second lien is with Utah Housing. In that’s the case, you’ll want to either pay off the second lien, or do a full VA refinance instead. Or do your VA streamline refinance through Utah Housing at a higher mortgage rate/costs.

What are the benefits of a Utah VA Streamline (IRRRL) Refinance?

Not having to submit your income to qualify, and not needing a new appraisal means you can refinance regardless if you’re currently employed, or even underwater on your home.

While a Utah VA Streamline (IRRRL) Refinance is one of the easiest ways to refinance, it does has to have an acceptable purpose/benefit. This is defined as one of the following:

  1. Interest rate decrease – the new VA mortgage must have a lower interest rate
  2. The monthly mortgage payment itself can increase as a result of rolling closing costs in, but not by more than 20%. A more than 20% increase in the monthly VA payment would require the veteran to qualify with sufficient credit and income.
  3. Refinancing an adjustable rate mortgage (ARM) into a stable fixed rate mortgage (even if the mortgage interest rate goes up in the process)
  4. Shortening the term of the loan. For example, going from a 30 year VA mortgage to a 15 year one.
  5. Increasing the loan term cannot exceed the original VA loan term by more than 10 years. A 15 year mortgage for example can be streamlined refinanced to a 25 year mortgage, but not to a 30 year one.

What documentation is needed on a Utah VA Streamline (IRRRL) Refinance?

Here is a list of documents you’ll need when doing a Utah VA streamline refinance:

  • Copy of your unexpired government issued ID (DL or Passport)
  • Copy of your Social Security Card
  • Most recent Mortgage Statement
  • Your Home Insurance Declaration page
  • A copy of your Mortgage Note – all pages. It’s a three to four pages document, and the top looks like this:

Utah VA IRRRL NOTE

 

  • Copy of your VA Certificate of Eligibility – you can request one from the VA website, or have your mortgage loan officer pull a copy via a system called Web LGY.
  • Mortgage payoff quote from your current creditor

Can I remove or add a borrower on a Utah VA Streamline Refinance?

Generally, the parties obligated on the original VA mortgage loan must be the same on the new loan, and the veteran must still own the property.

In the case of a deceased veteran, VA will allow the spouse to do a VA Streamline Refinance.

Here is a chart identifying whether borrowers can be added or removed via the Utah Streamline Refinance process:

Removing or adding borrower VA IRRRL

The VA itself does not require any credit or income documentation when there’s a change in borrowers on a VA Streamline refinance. However, the burden is on the lenders to document that the risk factors have been mitigated. This is done by verifying credit and income.

For any scenarios involving adding or removing a borrower via a VA Streamline Refinance, please email me at [email protected] or send me a quick text message describing your situation.

What closing costs will a Utah VA Streamline (IRRRL) Refinance have?

Your Utah VA Streamline Refinance (IRRRL) will have many of the same closing costs associated with mortgage transactions. You can expect:

  • lender fees such as origination charges or discount points  <- keep a close eye on how much you’re being charged in this section
  • underwriting, processing, administration fee – not all lenders charge this
  • credit report fee
  • VA funding fee of 0.5% unless the veteran has a disability rating and is exempt from paying it
  • title insurance and title specific fees
  • deed recording charge for the County you live in
  • pre-paid daily interest for the days remaining in the month after you fund and record
  • escrow setup if applicable (for your home insurance and property taxes)

What is the recoupment period on a Utah VA Streamline Refinance?

RECOUPMENT describes the length of time it takes for a Veteran to pay for certain fees, closing costs, and expenses that were necessitated by the VA Streamline refinance loan. To calculate it, divide the sum of all your closing costs by the reduction of the monthly principal and interest payment resulting from the refinance.

36 months maximum recoupment period from note date is required

This is a newer guideline, and a direct result of big lenders overcharging veterans on VA streamline refinances, and eating up huge chunks of their equity in the process. This was called “loan churning”.

You can do your own research on this, but some of the biggest offenders are mortgage companies that have the word “Veteran” or “VA” in their names. These companies are in no way associated with the U.S. Department of Veterans Affairs, or any government or non-profit agency supporting veterans.

It is possible to do a VA Streamline Refinance in Utah and have some or most of your closing costs covered. This happens when a veteran borrower chooses a higher interest rate that has a lender credit instead of any origination charges or discount fees. It requires a mortgage loan officer willing to give you the different options, and a lender that doesn’t have huge profits built into their interest rates.

Keep in mind that the VA does not determine your mortgage loan interest rate – private lenders do. Beware of pushy calls from your loan servicer, or bait and switch mailers that promise VA mortgage rates that seem too good to be true.

When in doubt, seek a second opinion. You can email me your quote or Loan Estimate from a competitor, and I’ll provide an honest comparison quote: [email protected]

How do I apply for a Utah VA Streamline (IRRRL) refinance?

Getting a Utah VA Streamline refinance started is easy. Please apply now via my secure online application, and I’ll usually respond within 24h.

You can also reach out to me by email, and I can provide a personalized, detailed VA streamline mortgage rate quote, so you know if a refinance is right for you. The only details I need are:

  • the original purchase price of your home
  • the current loan amount
  • the current interest rate

I return most quote requests in a matter of hours.

From start to finish your VA streamline should take anywhere from 2 to 3 weeks, with the biggest delay being the 3 business day rescission period on primary residence mortgages.

How do I “skip” 2 payments on a VA streamline?

All mortgage loans have the payment due on the 1st of the month. They also have a 15 day grace period in which you can make said payment without it being considered late. If you check your mortgage statement, it will have verbiage along the lines of “if we do not receive your payment by the 15th of the month, a late fee of XX will be charged”.

A mortgage payment isn’t actually late on your credit report unless a full month has passed since your due date, and the payment hasn’t posted. Note that mortgage payoffs can take a few days to post once your loan funds and records, so you don’t want to cut it close by postponing your month’s due payment in anticipation of the new loan kicking in.

If you’ve ever heard of the “2 skipped” mortgage payments, this is how that it will work:

  • IF your new VA streamline mortgage loan is scheduled  to “fund and record” before the 15th of the month, you can opt to hold off on making that month’s mortgage payment.
  • the first mortgage payment on the new loan won’t be due until over a month later – check on the exact date with your mortgage loan officer.

You’re still paying your daily interest throughout the process, but you’re avoiding making 2 of what would otherwise be scheduled mortgage payments. Those funds can be applied towards the loan closing costs, or used as you see fit.

Actual example:

A VA streamline refinance closes on the 10th of February. The veteran doesn’t make his February mortgage payment, because it’s not late unless it isn’t paid by the 15th of the month.

The pre-paid daily interest from the 10th to the 28th of February is collected as a closing cost on the new loan. The interest for the month of March is paid in April, when the first mortgage payment on the new VA streamline loan becomes due.

The veteran didn’t have to make his/her February and March payments due to the refinance process. Hence the 2 “skipped” mortgage payments.

If there is anything I haven’t covered in this article, please don’t hesitate to reach out at [email protected]. THANK YOU for your service🙏

I hope I can return the favor by providing you with a low cost Utah VA streamline refinance, and the information you need to safeguard your home equity.

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