When you, you replace it with a new one. Sometimes, this allows you to get a , or it might also come with , which you can use to cover home repairs or any other expense you might be facing.
How soon can you refinance your mortgage?
Are you considering a? Here's how soon you can do it for each type of home loan.
If you want toto a new one with a different rate or term, there's no waiting period, and you can do this as soon as you'd like. Just understand: It may cost you.
Some lenders impose prepayment penalties if you pay off your loan too soon after taking it out. These usually cost 1 to 2% of the outstanding loan amount, so on a $300,000 loan, you could owe up to $6,000.
, which allow you to take out a new, larger-balance loan and keep the difference in cash, are a different story. With conventional loans, you'll need to have had your first loan for at least six months before a cash-out refinance is an option.
, or loans guaranteed by the Department of Veterans Affairs, come with a 210-day waiting period — meaning you can't refinance until 210 days after the due date on your first mortgage payment. You'll also need to have made at least six monthly mortgage payments and be current on your loan (i.e., not behind on payments) to qualify.
FHA refinance waiting periods depend on the type of refinance you're seeking. With a standard rate-and-term refinance, you'll need to wait at least 210 days from your original loan's closing date.
If you're looking to take cash out with your refinance, you'll need to have lived in the home for at least one year and made on-time mortgage payments for the last 12 months.
USDA loans have some of the longest waiting periods of all. With these loans, you'll need to have had your mortgage for at least a full year before. This waiting period applies to all USDA loans, regardless of the specific type.
Remember that lenders have requirements, too. The waiting periods noted above are simply those for the loan programs themselves. The lenders who issue them may have additional requirements you must meet before you can qualify for a.
If you'rewith the same mortgage lender, you can usually expect longer waiting periods and potential prepayment penalties. Because of this, it's always important to shop around before you refinance. Mortgage refinance rates, terms, requirements, and waiting periods can vary quite a bit from one mortgage company to the next.