Va Rate Reduction

Reduction of the Va rate

VA: New guidelines for interest rate cuts Refinancing of credits The Department of Veterans Affairs published Circular 26-18-1 on February 1, 2018, announcing a new guideline regarding certain disclosure requirements for the VA Interest Rate Reduction Refinance Loans Directive (IRRRL). Generally, for IRFs, the veterinary must endorse a declaration confirming the impact of the funding on the veterinary's credit payment and interest rate.

Pursuant to the provisions of rec. 26-18-1, starting with mortgages concluded on and after 1 April 2018, creditors are required to make the first information documentation available to the borrower no later than the third working days following receipt of the borrower's request. Before this guide, the appropriate section of the VA Lender's Handbook did not notify creditors when this paper should be given to the veterinary.

The circular 26-18-1 also points out that, according to the current rules, the lender's certificate is only required for an increase in payments of 20% or more. Furthermore, the circular 26-18-1 provides guidelines on the types of information that should be added to the declaration and certificate. Specifically, there are certain supplementary information classes from the loan estimate to be added to the original statement and certain information classes to be added to the definitive statement from the closure declaration.

Creditors are also obliged to certify, as part of the credit guarantee certificate procedure, that the veterinary has been provided with this information. Furthermore, for credits concluded on and after 1 April 2018, creditors must submit the Declaration and Certification and VA Form 26-8923 (Interest Rate Reduction Refinancing Loan Worksheet) to the VA at the time of applying for the Loan Guaranty Certificate.

It is also stated in recital 26-18-1 that in the case of an increase in capital and interest payments due to a lower maturity or a change from a floating to a floating rate of interest, it is not necessary to show the repayment in monthly instalments, although creditors should indicate all other boxes in the declaration.

Copies of Newsletter 26-18-1 are available here.

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