FHA Loan Articles
Maximum Loan Amounts for VA Streamline Refinancing
Did you know the VA Streamline Loan program actually requires payments to be lowered or provide an alternative "net tangible benefit" to the borrower?
Naturally one of the first questions a VA borrower wants to know is how much the maximum loan amount on a VA Streamline is; according to the VA Lender's Guide, most VA home loans are limited to "the amount of the loan to the reasonable value of the property shown on the Notice Of Value plus the cost of energy efficiency improvements up to $6,000 plus the VA funding fee".
But when it comes to a VA Streamline Refinancing or Interest Rate Reduction Refinancing Loan, the VA loan limit includes the VA loan balance on the current mortgage, plus "the cost of any energy efficiency improvements up to $6,000, allowable fees and charges, up to two discount points, plus the VA funding fee." These are items that can increase the maximum streamline loan amount available to you because of the add-ons to the loan.
All of those options are allowed, but after careful consideration, some borrowers choose not to include the VA loan funding fee and discount points into their refinancing loan. This is a smart choice in many cases because of the rule which states that a VA Streamline Loan must include a credit check when the monthly payment increases by more than 20%.
The more extras like the VA loan funding fee or discount points a borrower wants to roll into a VA Streamline Loan, the closer a borrower may be to needing to apply for a credit-qualifying Streamline Refinance loan instead. It's important to evaluate how much your extras rolled into the loan will add to the mortgage payments and the overall cost of the VA refinancing loan.