VA IRRRL Closing Costs
Can VA IRRRL closing costs be rolled into the loan?
Allowable VA IRRRL costs can generally be included in the new loan balance, reducing the amount of cash needed at closing. Another common structure uses lender credits in exchange for different pricing. Neither method eliminates the economic cost: financed charges increase the balance, while lender credits are reflected in the rate or pricing.
What costs can appear on an IRRRL?
Depending on the transaction, costs can include lender charges, title or settlement fees, recording charges, prepaid interest, escrow funding and the VA funding fee when the borrower is not exempt. Exact charges vary by state, lender and closing structure.
Financed costs vs. lender credits
Financing costs may preserve cash but raises the new principal balance. Lender credits can reduce upfront charges but may come with a higher rate than a borrower would receive by paying more costs directly. Compare both structures using the same expected holding period.
What belongs in the break-even calculation?
Use the costs that represent the economic price of the refinance and compare them with the monthly savings. Escrow deposits can complicate the calculation because they are partly funding obligations that would exist anyway. Ask the lender to separate true transaction costs from prepaid or escrow items.
See VA IRRRL break-even and how much an IRRRL can save.
Funding fee
Many IRRRL borrowers owe a VA funding fee unless exempt. It can generally be financed. See VA IRRRL funding fee.
Compare quotes on an apples-to-apples basis
- Interest rate
- Points or lender credits
- Lender fees
- Third-party closing costs
- Funding fee treatment
- New principal balance
- Principal-and-interest payment
- Estimated break-even period
Return to the VA IRRRL hub or review general refinance closing costs.
Compare an IRRRL quote
Ask for both the monthly savings and the total cost structure so you can calculate how long the refinance takes to pay for itself.
Request a VA IRRRL reviewGeneral information only. Actual costs depend on the transaction and lender. 360 Mortgage Inc. NMLS ID 80777.