The VA streamline refinance, tested against the rules that protect you
Test 3: the rate must drop enough
Rule check
The lender must give you a net tangible benefit test. For fixed-to-fixed refinances the new rate must be lower by at least the minimum the statute sets, and a larger minimum applies when moving from a fixed rate to an adjustable rate. The reduction cannot come only from discount points unless the statute's conditions on paying and financing points are met.
Last reviewed against the primary sources listed below.
Read the statute
The exact thresholds are in section 3709(b). Ask your lender to show you the comparison it used.
Adjustable to fixed
Moving from an adjustable rate to a fixed rate is a recognized benefit in itself; ask your lender how the test is applied to your loan.
IRRRL questions
What is the net tangible benefit test for an IRRRL?
A required comparison showing that the new loan meets the statute's minimum rate reduction and other conditions.