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Closing Costs Normally Associated with an Interest Rate Reduction

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Closing Costs Normally Associated with an Interest Rate Reduction Department of Veterans Affairs VA Regional Loan Center Closing costs normally associated 3333 North Central Avenue with an Interest Rate Reduction Phoenix, AZ 85012 Refinance Loan (IRRRL) Toll-free number: 1-888-869-0194 Origination Fee * Discount Points Monday through Friday Prepaid Taxes and Hazard 7:30 a.m. to 4:00 p.m. MST Insurance Title Examination Fee Phoenix RLC Website www.vba.va.gov/ro/phoenixlgy/index.htm Title Insurance Fee Flood Zone Determination Environmental Endorsements National VA Loan Guaranty Website: www.homeloans.va.gov Recording Fees INTEREST RATE Special Mailing Fees (Example: Fed-Ex or Courier Fees) REDUCTION VA Funding Fee To contact the VA Eligibility Center call 1-888-244-6711 REFINANCE *The loan origination fee is limited to Email: [email protected] 1% of the loan amount. The lender may charge this flat fee or itemize the LOANS following fees not to exceed 1%: or write to: VA Eligibility Center (IRRRLs) - Application and Processing Fees P.O. Box 20729 Winston-Salem, NC 27120 - Document Preparation Fee - Loan Closing or Settlement Fee - Notary Fees To sign up for our new Email - Interest Rate Lock-In Fee Notification Service, logon to - Tax Service Fee http://mailman.listserve.com/ listmanager/listinfo/phoenixrlc - Reconveyance Fees - Commitment or Marketing Fees - Trustee’s Fees or Charges For more information on other VA benefits call 1-800-827-1000 This is not an all exclusive list of fees and charges. If you have any April 2008 questions concerning fees and charges on a VA Loan, contact the Phoenix Regional Loan Center. What is an IRRRL? What if I have a 2nd Mortgage? Note: Refinancing frequently or adding all of these items into your loan, may IRRRL stands for Interest Rate No loan other than the existing VA result in a situation in which you owe Reduction Refinancing Loan. You loan may be paid from the proceeds of more than the fair market value of the may also see it referred to as a “VA an IRRRL. If you have a 2nd mortgage, house. This can reduce the benefit of Streamline”. It is used to refinance an the holder must agree to subordinate refinancing since your payment will not existing VA guaranteed loan to reduce that lien so that your new VA loan will be lowered as much as it could be. the interest rate or to refinance an be a first mortgage. Also, you could have difficulty selling adjustable rate mortgage (ARM) to a the house for enough to pay off your fixed rate. loan balance. Can I take cash out if I have equity *Veterans entitled to VA compensation in the property? may be exempt from the Funding Fee. No, you must not receive any cash from the loan proceeds. The new loan amount may not exceed the sum of the I received a letter in the mail about a outstanding balance on the existing VA “special” refinance program for loan, plus allowable fees and closing veterans. Is this the same What are the requirements? costs. You may also add up to $6,000 program? of energy efficient improvements into Some lenders may contact you The loan you are refinancing must the loan. See your lender for details. suggesting that they are the only lender have been guaranteed using your VA with the authority to make IRRRLs. This entitlement. The new loan will re-use is not so. Any lender of your choice may the entitlement you originally used. A process your application for an IRRRL. Certificate of Eligibility is not required. While it may be the best place to start Your lender can verify your previous How much will this cost? shopping for an IRRRL, you do not have loan information by using our to go to the lender you make your automated system. An IRRRL may be done with “no payments to now or to the lender from money out of pocket” by including all whom you originally obtained you loan. No appraisal or credit underwriting is costs into the new loan. Some lenders required by VA. However, you should may say that VA requires certain VETERANS ARE STRONGLY be aware that some lenders may closing costs to be charged and URGED TO CONTACT SEVERAL require them anyway. included in the loan. The only cost LENDERS WHEN CONSIDERING AN required by VA is a funding fee* of ½ % IRRRL. THERE MAY BE BIG Also, the occupancy requirement is of the new loan amount. This may be DIFFERENCES IN THE TERMS different from other VA loans. When paid in cash at closing or added to the OFFERED BY THE VARIOUS you originally obtained your VA loan, new loan. LENDERS YOU CONTACT. you certified that you occupied or intended to occupy the home. For an In addition to the energy efficient IRRRL, you only need to certify that improvements, you may also include you previously occupied it. up to 2 discount points into the loan. .
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