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What Is A VA Mortgage Rate Reduction Loan?

By Stacy Williams

A VA mortgage rate reduction loan is a loan program designed to help a VA loan holder reduce the current interest rate on their mortgage. Much like a loan modification program in the public sector, a VA mortgage rate reduction plan is specifically for veterans. The program is only for loans guaranteed by the Veterans Administration and does have some qualifications attached for the mortgage holder. To qualify for the VA mortgage rate reduction loan program you must be current on your mortgage. You cannot have had any late payments on that mortgage in the last six months. You must show that you are gainfully employed or have a guaranteed income each month. These are the only two requirements for the program.

What Does A VA Mortgage Rate Reduction Loan Actually Do?

A VA mortgage rate reduction loan will take your current mortgage and refinance it at a lower rate. This will reduce your monthly payments. There are no credit checks involved in the process. The VA insurers assume that since you are employed and have kept your mortgage current at the higher rate, you will have no problem doing so at a lower rate. The process is actually very fast and simple. However, you must realize that the VA mortgage rate reduction loan does not allow you to access any equity in your home. You can only refinance the exact amount that you owe on the home. If you need to utilize the equity in your home, you will need to seek out another program.

The VA Mortgage Rate Reduction Plan Seems Awful Easy – Is It Too Good TO BE True?

The program is easy and has only two qualifications attached. You must be current in your mortgage and be gainfully employed. It was designed to assist the men and women of this country who have served with honor. They have made the qualifications easy for that reason and that reason alone.

Related posts:

1. What Is A VA Mortgage Rate Reduction Loan?
2. How Do I Get A Rate Reduction On My Mortgage?
3. What Can A New VA Loan Conversion Refinance Do For Me?
4. Do I Qualify For An Interest Rate Reduction Refinancing Loan?
5. What Is An Interest Rate Reduction Refinancing Loan (IRRRL)?