A VA streamline loan is a VA loan that is available to veterans who are currently in a VA loan. It allows the veteran to lower his/her interest rate with about a third of the paperwork and hassle. It often times allows the veteran to receive cash back by receiving a refund on their escrow balance and deferring up to 2 monthly mortgage payments. This can add up to thousands of dollars in some instances.

Perhaps the biggest benefit of the VA Streamline program in today’s market is that it doesn’t require an appraisal (in most instances). This has given veterans a huge advantage over the general public in taking advantage of the low Interest rate environment that we find ourselves in. This is because most conventional borrowers (non-veterans) are required to first obtain an appraisal on their home which shows that they have adequate equity (usually 20%) in their home. We all know what a subjective thing that real estate values can be in today’s real estate market due to all the foreclosures that have been hitting the market. This has allowed VA Streamline borrowers to get their interest rates down regardless of the state of the real estate market. What a huge advantage!!

Rates are at historic lows and it is a phenomenal time to be taking advantage of VA Streamline program. If you would like to learn more about the VA Streamline program, you may contact a VA loan specialist at: 888-807-2871 or on the web at: www.expressvaloan.com.

So what does this mean for Veterans looking for a VA loan? Well… the first thing is that veterans can now have the peace of mind of knowing, up-front, whether or not they are being quoted a “par” rate. The “par” rate is the rate at which there is not a rebate or cost associated with rate itself. Secondly, any rebate that is associated with the rate will be required to be credited back to the veteran at closing.

In conjunction with this, the VA has come out reiterating its refusal to lift its 1% origination cap on VA loans. This legislation is having a very detrimental impact on brokers trying to offer VA loan products. The reason for this is because without the ability to make a yield spread premium, or the ability to charge more than a 1% origination fee, brokers will be left making less than 1% on each VA loan that they offer, that is, after continuing to pay VA’s non-allowable fees out of their own pocket. Accordingly, the VA loan program may no lose all of its profit incentives for brokers.

Accordingly, there are many that believe that the VA loan will become a loan program exclusively offered by banks. This is due to the banks’ ability to make a service relese premium (SRP) which does not have to be credited back to the veteran at closing which allows the loan officer to make a profit margin similar to what has existed in the past.

The important question remains … Will the loss of brokers ultimately lead to higher interest rates for VA loans due to the loss of competition in the VA loan marketplace? Many argue yes.

To speak to a VA loan specialist about these policy changes and how they are affecting VA Loan Rates, call 1-888-807-2871 or go to www.expressvaloan.com.

However, if the Veteran has 20% or more to put down on their home it makes more sense to do a conventional loan due to the absence of the VA funding fee. There is one exception to this. That is, if the veteran thinks that there is a good possibility that VA loan rates will go down in the near future. In this instance, it might still make more sense to do the VA purchase loan over the conventional loan so that the veteran may subsequently take advantage of what is known as the VA Streamline loan or “IRRL” loan.

This brings us to the second instance of when a VA loan makes sense over a conventional loan and that is when the Veteran is refinancing into a VA Streamline loan. The VA streamline loan is a loan only available to Veterans who are currently in a VA loan, are current on their payments, and are looking to lower their interest rate. There are a couple of other qualification standards but they are pretty minimal. The VA Streamline loan shows its true beauty in times just like now. Many VA Streamline Lenders do not require appraisals to do a VA streamline loan. This means that regardless of the state of the economy or real estate market, Veterans are still able to take advantage of a low interest rate environment such as the one we find ourselves in now. Tens of Thousands of conventional loan borrowers on the otherhand, are currently stuck in their conventional loans without the ability to refinance to a lower interest rate because of their home’s declining appraised value.

In very few instances does the VA cash-out loan make financial sense over some of the other cash-out loan programs available. This is due to the exorbitant VA funding fee charged to the Veteran for his/her subsequent use of their VA entitlement. In such instances one is better off pursuing loans such as the FHA Cash-out loan in today’s lending environment.

If you are considering a VA loan and would like more information, I would highly suggest that you talk to someone who specializes in VA Purchase & VA Streamline loans and who does not require an appraisal on VA Streamlines loans in today’s down trodden real estate market. An excellent resource for this is www.expressvaloan.com or by phone at 888-807-2821.