Good time to VA IRRRL?

13 Replies

I currently have a VA loan on my SFR househack for 3.625%. I'm seeing USAA and Navy Fed offering around 3.5%. Are there lower rates out there? I won't be paying any funding/origination fee due to disability so slightest bit of lower interest will help for sure.

@Kevin PhuThat's definitely the lowest I've seen. I just closed on a new VA loan and got 4.25%, however my credit score isn't fantastic so that may be why the rate is a little higher. I'm not sure I would personally go through the effort of a full refinance to save 0.125%, but that's just me. If you are willing to sludge through the paperwork and it won't cost you anything, than I guess it doesn't hurt.

@Kevin Phu

Despite not paying those fees (which is great), there are still a number of other fees/items (insurance, recording, title, escrow, gapped monthly mortgage payments, etc.) that will get rolled into increasing your overall new principal balance for the refi.

Go on an amortization calculator like bankrate.com's. Plug in the numbers for your existing loan and it's remaining loan life. Then do the same for a new loan, with a principal balance that will be 5-10K higher AND a reset loan term. Look at the amortized schedules for each and see for yourself how much this refi will cost you over time. Those numbers will decide for you.

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@Kevin Phu

I Totally agree with @Matthew Rayl on this.  You need to look at a what the refi will cost you over time.  Also, there are lower rates than 3.625% out there.  If you have good credit you can get 3.5% and I have seen as low as 3.125%.  There are signs pointing to rates being lowered at the end of the year, but why risk it and wait 6 months for an extra 1/8th percent?  Strike while the iron is hot!

Derek Stack

Did you end up going for it? I am talking with someone right now who is offering me rates as low as 3.25, which is a whole point lower than when I bought the place a year ago. I'm just wondering what disadvantages there might be, because it seems like a pretty sweet deal (in my case, this is a long term buy and hold SFR rental).

@Trevor Soderholm Just curious. Were you able to move forward with this? Right now, I'm getting a rate of 1.75%. I'm sure a year from this post, you are getting it as well. 

As for disadvantages, there are 2 that come to mind. First, how long would it take you to recoup the fees incurred when you refinance (if you're holding it for the long term then you're good). Second, is this a different loan or just a refinance? In that case, it doesn't necessarily free up the current entitlement.

I wish you the best of luck on your investing journey!

@Adrian Fajardo. Is that 1.75% rate with or without points. Most of the offers I have seen for rates that low come with 1 - 2 DPs. Seeing a lot of 2.25% with no points.

If you have a lender that you recommend with rates below 2%, please DM me!

Originally posted by @Brad Fisher:

@Adrian Fajardo. Is that 1.75% rate with or without points. Most of the offers I have seen for rates that low come with 1 - 2 DPs. Seeing a lot of 2.25% with no points.

If you have a lender that you recommend with rates below 2%, please DM me!

 The offers are mostly from the mountains of letters I received in my mail. I don't actually have a lender that offered those rates. If ever I find one, I'll make sure to shoot them your way.

@Adam Klich sorry for the late response. I'm curious, have you already refinanced? I'm currently in the process of doing one with Freedom Mortgage. They locked my rates at 2.25%. I hope it all works out with you.

@Kevin Phu

I just spoke with my lender yesterday, and the rates are very close to what @Brad Fisher stated. I'm confident if you have a good credit score, you can get in the low 2's without points. What market are you looking to purchase in? 

Sincerely,

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