If you want to refinance your mortgage, you can generally refinance your loan at any time. You may have to wait a specified amou♊nt of time depending on the type of mortgage you have and the type of refinance loanও you are seeking. However, the right time to refinance is when it’s in your financial interest.

Learn more about how refinancing works, the specific rules around refinance waiti🀅ng periods for major home loan programs, and the pros and cons of early refinancing.

Factors to Consider Before Refinancing

A refinance pays off your existing loan and replaces it with a new one, and you’ll have to go through a new application process and closing, which can also entail expenses to consider. Deciding whether ꦐto refinance involves several calculations and comparisons. You’ll need to determine whether a new loan would make financial sense, and then🅘 which new loan would be best for you.

澳洲幸运5官方开奖结果体彩网: Evaluate the following factors:

• Interest rates: Refinancing into a lower interest rate mortgage will save you money in the long term. When you calculate the total savings, factor in closing costs.
• Loan terms: Aim to work with a mortgage refinance lender or home loan program that has more favorable terms than your current loan. For instance, perhaps you want to move from a nontraditional mortgage to a conventional loan.
• Closing costs: Estimate your closing costs and then calculate how long it will take you to recoup those costs. If you don’t plan to stay in the home for that period of time, it may not be worth refinancing.
• Your credit situation: Check your credit score. If you have a lower credit score than when you obtained your original loan, you may not get a better interest rate, depending on broader 澳洲幸运5官方开奖结果体彩网:mortgage interest rate trends.

Refinancing may be a good idea when:

• Interest rates are low: During periods of lower mortgage interest rates, many people try to refinance their home loans to lower their monthly payments and reduce their overall loan costs.
• Your credit score has improved: Some people refinance after a significant increase in credit score, since they may be able to qualify for a better interest rate.
• You want new loan terms: You may want to refinance from a 30-year loan to a 15-year loan, or to move into a different loan program (i.e. FHA to conventional).
• You have a major life change: If a couple divorces or someone passes away, a refinance can help put the home into one person’s name.
• You want to tap your equity: Depending on the situation, it might make sense to do a cash-out refinance to access your equity versus another type of loan option if you need a lump sum of cash.

Waiting Periods for Refinancing

Rules for Refinancing Conventional Loans

Conventional loans, which are non-government loans backed by Fannie Mae or Freddie Mac, generally have a 12-month waiting period for cash-out refinancing, or just 30 days for non-cash-out refinance. For limited cash-out refinance, there is no seasoning requirement, according to Fannie Mae, meaning you can refinance anytime. 

Rules for Refinancing FHA loans 

Federal Housing Authority (FHA) loans are government-backed loan programs. There are specific guidelines for diffe𒊎rent refinancing options.

• FHA cash-out refinance: Borrowers have to have lived in the home for at least 12 months before they can apply for an FHA cash-out refinance.
• Simple refinance: If you’re going from an FHA loan to another FHA loan with no cash-out, there is no waiting period. However, borrowers cannot have had any late payments in the six months before applying.
• FHA streamline refinance: With this type of refinance, the process moves more quickly since there is less underwriting for FHA home loan borrowers, but there is a seasoning requirement. It must be at least 210 days since the closing date on your original mortgage, and you must have made on-time payments on the loan for at least six months. 

Rules for Refinancing VA Loans

U.S. Department of Veteran Affairs (VA) loans are for military service members, veterans, and their spouses. There are two different types of refinances: a cash-out VA loan or an Interest Rate Reduction Refinance Loan (IRRRL). Both require at least 210 days with your existing VA loan before you can apply. Note there is a slight difference in the language for that requirement. For the cash-out, the 210 days start from the loan closing date; for an IRRRL, the 210 days is counted from the existing loan’s first payment due date.

Rules for Refinancing USDA Loans

U.S. Department of Agriculture (USDA) loans also have two different refinancing options: 澳洲幸运5官方开奖结果体彩网:streamlined (which has no credit check) and non-streamlined. Both types have a waiting period of 12 months, and must have been paid on time for the last six months before application.

Rules for Refinancing Jumbo Loans

Jumbo loans, also called non-conforming jumbo loans, are mortgages that are above the borrowing limit (which is $766,550 in 2024 for a one-unit property) set by the Federal Housing Finance Agency. Because of that, when refinancing these typ🎐es of loans, the qualifications and processes will vary by lender. In general, the loans usually do not hav𝔉e a set waiting period, however.

Benefits and Risks of Early Refinancing

澳洲幸运5官方开奖结果体彩网:Deciding to refinance soon after your original home loan–or anytime–is not a decision to take lightly. For starters, it involves closing costs and going through a full loan application and underwriting process. In some cases, though, 澳洲幸运5官方开奖结果ඣ体彩网:refinancing can make financial sense. Sometimes, you ma🎀y have to refinance out of necessity.&nb𒈔sp;

Benefits

• Saving on interest payments: If you can 澳洲幸运5官方开奖结果体彩网:refinance to a lower interest rate, you can lower your monthly payment and/or the overall cost of your loan.
• Access to cash: If you go the cash-out refinance route, it can help you cover the cost of home repairs and upgrades, or allow you to consolidate high-interest debt.
• Can combine home loans: If you have a home equity loan or HELOC on top of your mortgage, you can pay off both loans with a refinance so that you only have one payment.
• May move into a more favorable loan program: If you took a home loan with less than ideal terms or a high interest rate because you couldn’t qualify for anything else at the time, a refinance into a better loan program may be a good idea if your financial situation and creditworthiness has since improved.

Risks

• Closing costs increase your total debt and can decrease your equity: Closing costs are rolled into the refinance loan, bumping up your principal balance. This can also mean that you’ll have less equity in the home (unless the home value has gone up since you bought the home). 
• Losing money if you end up selling: Depending on how the numbers work out, it could take a few years for you to reach the point in which you break even with the 澳洲幸运5官方开奖结果体彩网:refinance closing costs. If you sell and move before that time, you will not make back that money.
• Getting approved: If your credit and income situation has changed significantly since your original home loan closed, it might be harder to qualify for the best rates. 
• If you pay off your home loan early, there could be a penalty: The majority of home loans do not charge a 澳洲幸运5官方开奖结果体彩网:prepayment penalty. But if yours does, that will be another expense tacked on to your new loan.

The Bottom Line

For a variety of reasons, you may decide that you want to pay off your existing mortgage with a new one, so it’s important to know your refinancing op💃tions and understand the timing. In some cases, you may have to wait a few months or up to a year, while other loan types allow you to refinance anytime. 

Even when you are far enough along with yo❀ur mortgage to refinance, however, it’s important to carefully consider if refinancing makes financial sense for you. Crunch some numbers with a refinance calculator and speak with your financial advisor to weigh the pros and cons.