How to Refinance Your VA Loan

How to Refinance Your VA Loan
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(This article originally appeared in the March 2021 issue of Military Officer, a magazine available to all MOAA Premium and Life members. Learn more about the magazine here; learn more about joining MOAA here.)


Many veterans purchase homes using a loan that is backed by the VA, which is usually called a VA loan. One little known benefit of VA loans is the ability to refinance the loan at a reduced cost and with less paperwork than a conventional loan refinance.


This program is called an Interest Rate Reduction Refinance Loan, but it is usually referred to as a IRRRL or a streamline VA refi. An IRRRL is a refinance from a VA loan to another VA loan to lower the interest rate, lock in a fixed interest rate, or change the term of the loan.


The benefit of an IRRRL is that it requires less paperwork than a traditional loan refinance, does not require a new appraisal, and the VA funding fee is only 0.5%. VA loan funding fees may be waived for those receiving VA disability compensation.


[RELATED: Financial Resources From MOAA]


It’s important to note that IRRRLs do have other costs, including origination fees, lender and closing costs, local area taxes or transfer fees, and prepaid escrow costs. You can roll these closing costs into the refinanced loan, but be sure to compare all the costs to be sure that the refinance makes sense.


If you have a VA loan, and your interest rate is higher than rates currently available, an IRRRL could help decrease the overall cost of your mortgage.


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About the Author

Kate Horrell
Kate Horrell

Horrell is a personal financial educator and military spouse. Get more finance tips at