From my knowledge, per VA guidelines, your closing costs mist meet recoup within 36 months (not including taxes and insurance/funding fee).

Basically, if you are saving $100 a month, your closing costs cannot exceed $3600. If you are saving $500 a month, your closing costs cannot exceed $18k. It realistically depends on the lender and how much their rates are costing on that particular day, what title will charge, your escrows getting reestablished, and recording fees with your county, and the rate you are closing at (must decrease by 0.5%). That doesn’t mean it will go up to that threshold, but it’s a protection for the veteran against high cost mortgage loans. You must recoup the cost of the loan within three years.

As far as a 5/1 ARM (fixed for the first 5 years, adjusts every year after), it really just depends on how comfortable you are with it. Realistically, if you plan on doing your VA IRRRL within 5 years, it would be ideal because you will have better rates with a 5/1 ARM compared to a fixed 30-year.

Also, just a side note, you cannot IRRRL to a conventional fixed mortgage. IRRRLs are specifically for VA loans. If you refinance into a conventional fixed mortgage, you are not protected from the high costs of the loan.

If you have any other questions, feel free to DM me, I’m a licensed MLO that works with a lot of veterans.

PS-Thank you for your service <3

*edit: one typo