Refinancing* your mortgage may be a smart financial move, whether you’re looking to lower your monthly payments, shorten your loan term, or tap into your home’s equity. However, one common question homeowners have is, “How soon can I refinance after my initial mortgage?”
Timing Is Everything
The timing of your refinance may depend on several factors, including the loan type, your homeownership goals, and the current market conditions. Here’s a breakdown to help you understand when the right time to refinance may be.
Conventional Loans
For homeowners with a conventional loan, there’s usually no set waiting period to refinance. However, most lenders require you to wait at least six months after your original mortgage closes. This waiting period may allow lenders to assess your payment history to determine whether you’re a good candidate for refinancing.
FHA Loans
If you have an FHA loan which is insured by the U.S. government’s Federal Housing Administration (FHA), you may be eligible for an FHA Streamline Refinance, which is a simplified way to refinance. The FHA requires you to wait at least 210 days from the date your current mortgage closed and ensure that you’ve made at least six on-time payments before you can apply for this option.
VA Loans
Veterans and active-duty service members with a VA loan may take advantage of the VA Interest Rate Reduction Refinance Loan (IRRRL), also known as a streamline refinance. Like FHA loans, the VA typically requires a 210-day waiting period from closing your original loan.
USDA Loans
Refinancing may require a bit more patience for those with a USDA loan. The USDA offers a streamlined assist refinance, but you must wait at least 12 months from closing your original loan before you’re eligible.
Consider Your Homeownership Goals
Before deciding to refinance, it’s essential to consider your homeownership goals. Are you looking to lower your monthly payments, pay off your mortgage faster, or access your home’s equity? Understanding your goals can help you determine whether refinancing is right and when the timing is best.
Costs to Consider
While refinancing can offer many benefits, it’s essential to factor in the costs. Closing costs for a refinance may range from 2% to 5% of the loan amount, so you’ll need to determine if the savings
outweigh the costs. Additionally, some loans may include prepayment penalties, so be sure to review your original loan agreement before refinancing.
Ready to Refinance?
Refinancing your mortgage can be a powerful tool to help you achieve your homeownership goals, but timing is key. Whether you’re looking to lower your interest rate, shorten your loan term, or access your home’s equity, understanding the timing requirements and potential costs can help you make the best decision for your situation.
If you’re considering refinancing, our team at Supreme Lending is here to help. We’ll guide you through the process and ensure you have all the information you need to make an informed decision. Contact us today to discuss your refinancing options.
*By refinancing an existing loan, total finance charges may be higher over the life of the loan.