VA Streamline Refinance (IRRRL) Closing Costs in 2025: What to Expect

A VA Streamline Refinance still has closing costs, but they are less than the closing costs on a Conventional Refinance.

What Is a VA Streamline Refinance (IRRRL)?

The VA Streamline Refinance, officially known as the Interest Rate Reduction Refinance Loan (IRRRL), helps homeowners with an existing VA loan refinance into a lower interest rate or better loan terms. It’s one of the simplest refinance options available—often requiring no appraisal, no income verification, and minimal paperwork.

But even with its simplicity, borrowers often ask: How much are the closing costs on a VA Streamline Refinance in 2025?

Let’s break it down.

Typical VA Streamline Refinance Closing Costs in 2025

While VA IRRRL closing costs are generally lower than a standard refinance, they still exist. On average, borrowers can expect to pay between $2,000 and $4,000, depending on the loan size, lender, and location.

Here’s a breakdown of the most common fees:

1. VA Funding Fee

• Amount: 0.5% of the loan amount

• Who Pays It: All borrowers unless exempt (e.g., veterans with a service-connected disability or surviving spouses)

• Can It Be Rolled Into the Loan?  Yes

  
  

2. Lender Fees

• Includes origination fee, underwriting, and processing fees

• Amount: Typically between $500 and $1,500

• Some lenders may offer no-cost refinance options by charging a slightly higher interest rate

  
  

3. Title and Escrow Fees

• Covers title insurance, title search, and closing services

• Amount: Usually $500–$1,000, depending on state and title company

  
  

4. Recording and Government Fees

• County recording fees for filing the new mortgage

• Amount: Usually $50–$200

  
  

5. Prepaid Items and Escrow Setup

• Includes prepaid interest, property taxes, and homeowners insurance

• Your lender will collect these to fund your escrow account

• Amount: Varies based on when you close and your tax/insurance schedule

Can You Roll VA IRRRL Closing Costs Into the Loan?

Yes. Most VA-approved lenders allow you to roll closing costs into the new loan, as long as:

• The new loan amount still meets VA guidelines

• The loan still results in a net tangible benefit (e.g., lower monthly payments or better terms)

  
  

The VA funding fee can always be financed into the loan, even if you choose to pay other costs out of pocket.

Is a No-Cost VA Streamline Refinance Possible?

Yes—but there’s a catch.

A no-cost VA IRRRL usually means:

• The lender covers your closing costs

• In exchange, they offer you a slightly higher interest rate

  
  

This option can work well for borrowers who want to avoid upfront expenses, but it’s essential to compare rates to make sure the long-term savings still make sense.

VA IRRRL Closing Cost Example

Fee Type	Estimated Amount
VA Funding Fee (0.5%)	$1,250 (on $250,000)
Lender Fees	$800–$1,200
Title & Escrow Fees	$600–$1,000
Recording Fees	$100–$200
Prepaid Taxes/Insurance	$500–$1,000
Total Estimated Costs	$2,000–$4,000

How to Lower Your VA Streamline Closing Costs

• Ask about lender credits – some lenders will offset fees

• Use your escrow refund from your previous loan

• Request a loan estimate early to see all fees upfront

• Check for VA funding fee exemptions if you're a disabled veteran or surviving spouse

Final Thoughts

The VA Streamline Refinance (IRRRL) is a powerful tool for eligible homeowners in 2025, offering a simple path to lower interest rates and payments. While there are still closing costs, the ability to roll them into your loan or offset them with lender credits makes this one of the most affordable refinance options available.

Before you lock in your IRRRL, be sure to compare lenders, request a Loan Estimate, and confirm your eligibility for VA funding fee waivers.

How I Can Help You

When it comes time to purchase a home or refinance an existing loan, I want to help you! Hopefully articles like this give you good information and a better understanding of the mortgage world but let me use my experience and expertise to help you with your particular situation.

I tell my clients and referral partners that a mortgage transaction starts with a simple conversation. Let’s talk about your financial situation, budget, and goals so that I can help you determine the best solution for you. During a 10-minute informal conversation, we can get you on the right path as it relates to a home purchase or mortgage refinance.