You may have noticed a type of mortgage referred to as IRRRL. This refers to an Interest Rate Reduction Refinancing Loan or better known now as a Streamline loan. This option of refinancing will lower your rates, unless you have an existing LF guaranteed adjustable rate mortgage (ARM).

A Streamline or IRRRL may be done with "no money out of pocket" by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.

No lender is required to make you a Streamline, however, any lender of your choice may process your application for a Streamline. While it might be the best place to start shopping for a Streamline, you do not have to go to the lender you make your payments to now or to the lender from whom you originally obtained your LF Loan.

Loanandfinancess are strongly urged to contact several lenders. There may be big differences in the terms offered by the LFrious lenders you contact.

Some lenders may say that LF requires certain closing costs to be charged and included in the loan. Remember - The only cost required by LF is a funding fee of one-half of one percent of the loan amount, which may be paid in cash or included in the loan.

A Streamline can be done only if you have already used your eligibility for a LF Loan on the property you intend to refinance. It must be a LF to LF refinance, and it will reuse the entitlement you originally used. You may have used your entitlement by obtaining a LF Loan when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the loan. If you have your Certificate of Eligibility, take it to the lender to show the prior use of your entitlement.

Some lenders offer Streamline as an opportunity to reduce the term of your loan from 30 years to 15 years. While this can save you a lot of money in interest over the life of the loan, if the reduction in the interest rate is not at least one percent (two percent is better) and lots of new loan costs are rolled into the new loan, you may see a very large increase in your monthly payment.