Homeowners who financed their homes with a VA loan may be in a position to refinance and save even more on top of existing VA benefits. An Interest Rate Reduction Refinance Loan (IRRRL) allows borrowers with an existing VA loan to refinance to a lower interest rate, thus leading to lower mortgage payments.
Veterans that stand to benefit most from an IRRRL are those with an adjustable interest rate mortgage (arm). Adjustable rate mortgages may be refinanced into a fixed rate mortgage allowing homeowners to lock in lower rates.
Frank Nothaft, VP and chief economist at Freddie Mac, said “On average, borrowers who refinanced reduced their interest rate by about 1.8 percentage points" which would save them roughly $3,600 on a $200,000 loan.