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Applying for a VA Streamline Refinance Loan After Marriage or Divorce


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TERMINOLOGY

A VA Streamline Refinance mortgage loan can be applied for if you are a military member and want to payoff your existing VA loan. This loan is also called a VA Interest Rate Reduction Refinancing Loan, or VA IRRRL. In order to qualify for a Streamline Refinancing loan, the VA has a set of guidelines for you to follow when it comes to a change in your marital status, the removal of a co-borrower due to divorce and when you get remarried. You will not be able to get any cash proceeds from the Streamline loan, regardless of your reason for refinancing.

Borrowers

The VA Streamline Refinance mortgage loan requires all of the signers on the original VA loan to be included on the Streamline Refinance loan documents. The main reason the VA calls this loan a Streamline Refinance is they have the information already on file for all borrowers who are on the original VA mortgage loan. Since the VA has already approved the original loan based on this information, not much paperwork is required to process the Streamline loan as compared to a standard VA mortgage loan used for the purpose of buying a new home.

If you want to remove a co-borrower from your original VA mortgage loan, you will not be able to qualify for Streamline Refinancing. Instead, you will have to apply for a new VA loan which requires a full credit check, appraisal and other verifications associated with the standard VA mortgage loan application process.

Divorce

If you are divorced and you want to refinance your VA loan with your civilian ex-spouse, you will first need to determine who will keep the home. When you are letting your civilian ex-spouse keep the home, the VA recommends that you have your ex-spouse apply for a regular refinance loan, and if they are approved the loan should be just in their name. This will remove you from the original mortgage loan, and free up your VA loan eligibility so you can then buy another home that can be financed by a new VA mortgage.

If you decide to apply for a VA Streamline Refinance loan with your ex-spouse, and they are going to be responsible for the loan, your VA loan eligibility remains tied to the property even though you are not making any of the mortgage payments.

Marriage or Remarriage

If you have an existing VA mortgage loan, and you decide to get married or remarried, your new spouse can be added to the Streamline Refinance loan. To remain in compliance with the VA, make sure to check with your lending institution to find out what documentation they require in order to add your new spouse to the Streamline mortgage loan. This can include a credit check on your new spouse, verification of their income, or any other pertinent information the lender needs in order to process your new spouse’s loan application.