How Soon Can You Refinance a Mortgage?

Maybe you just bought a house, or even refinanced recently. The good news is, it might
not be too soon to refinance again.

With mortgage rates reaching the lowest levels ever on record, many homeowners are
beginning to ask the question, “How soon can you refinance a mortgage?”

Mortgage refinancing involves taking a new loan to replace your current mortgage.

When you do it, you can enjoy lower interest rates, lower monthly payments with longer
terms, and even take some of your home equity in cash, and more.

Let’s find how soon you can begin to refinance a Mortgage

How soon can you refinance a mortgage?

Like we stated earlier, how soon can you refinance a mortgage depends on the type of mortgage loan, the lenders, and the refinance you plan to use.

Conventional Loan Refinance

How soon can you refinance a mortgage, if you have a conventional mortgage, especially one backed by Fannie Mae or Freddie MacIn that case, you can refinance almost immediately after closing your home purchase or finishing up a previous refinancing.

However, keep in mind that there is a six month “seasoning period” with lenders before a borrower can refinance them. So if you are planning to refinance with the company you are currently using, you may have to wait sometime.

Cash-Out Refinance

If you plan a cash-out, there is a six-month wait period before you can refinance regardless of the loan type you have. With cash-out finance, you’ll typically leave at least 20% equity in the home. So, before using cash-out refinance, you’ll need to have built-up enough equity. But this can take a while.

Government Loan Refinance

Things are slightly different when it comes to government-backed mortgages, such as FHA, VA, and USDA LOANS. This kind of loan allows you to benefit from streamline refinancing, which cuts down on time and paperwork that has to do with refinancing. Also, this type of loan helps you get a lower rate, faster.

Frequently Ask Questions about Refinance

How long do you have to wait to refinance?

You have to wait 6 months since your most recent closing to refinance if you’re taking
cash-out or using a streamline refinance program. Otherwise, there’s no waiting period
to refinance.

How often can you refinance your mortgage?

You can refinance your mortgage as many times as it makes financial sense to do so.
The only caveat is that you might have to wait six months from your most recent closing
(whether it was a purchase or previous refinance) to do it again.

How much does refinancing cost?

Refinancing costs are similar to closing costs when you buy a house. Is about 2-5% of
the loan amount on average. So if you refinance with a loan balance of $300,000, it
would likely cost about $8,000-$15,000.

Does refinancing hurt your credit?

When you refinance, we check your credit using what’s known as a “hard credit pull.” A
hard pull can knock a few points off your score.

Does refinancing start your loan over?  

Yes. When you refinance, you are opening a brand new mortgage loan. So you start
your repayment schedule over at day one. 

How soon can you refinance a mortgage – Conclusion

Refinancing is worth it when you find out it can let you save monthly or over the loan’s
life. Most mortgage shoppers don’t risk refinancing too early and can apply as soon as a
previous loan closes. However, as you are planning to refinance your mortgage loan
and enjoy its benefits. Contact us and let’s find what works best for you or
you can apply here to see what you qualify for.

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