How Often Can You Refinance Your Mortgage?
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Generally speaking, you can refinance your mortgage as often as you want. However, some lenders or loan types require a waiting, or “seasoning,” period before you can refinance your old loan into a new one.
It can make financial sense to refinance multiple times, especially if mortgage rates are lower now than when you got your existing loan. But you’ll want to weigh the pros and cons, because you might not always come out ahead financially. Here’s what to consider.
When does it make sense to refinance again?
If you’ve refinanced before, you might already be familiar with the benefits. It’s fine to refinance again for the same reason — say, locking in an even lower interest rate. But as your household finances change, your motivation to refinance again might change, too.
Popular reasons to refinance include:
Getting a lower interest rate.
Lowering your monthly payment.
Shortening the length of your mortgage to pay less interest over time.
Switching from an adjustable-rate to a fixed-rate loan.
Dropping mortgage insurance.
Borrowing against your home equity with a larger loan (a cash-out refinance).
Adding or removing a co-borrower, such as in the case of a divorce.
Whatever your motivation to refinance, start by calculating your break-even point. From a financial standpoint, a refinance makes sense when the benefits outweigh the costs.
» MORE: Is it a good time to refinance?
How soon can you refinance a mortgage?
With some loans, you can refinance as early (or often) as you want. Other loan types require a waiting period, what the mortgage industry calls "seasoning." Here’s how soon you can refinance a few common loan types.
Conventional or jumbo loans: No typical seasoning requirement, although you might have a six-month wait to refinance with the same lender. (If you don’t want to wait, you can always refinance with a new lender.)
FHA: The Federal Housing Administration has several types of FHA refinance loans, each of which has its own seasoning requirement. As a rough estimate, expect to wait at least six months.
VA: For loans insured by the Department of Veterans Affairs, the seasoning requirement is 210 days after your first mortgage payment or after you’ve made six payments, whichever is longer.
Cash-out refinance: For a conventional cash-out refinance, the seasoning requirement is at least six months, but some lenders set the requirement at 12 months.
Downsides of refinancing more than once
A refinance isn’t free money, and it’s not always the right call. Here are some downsides to factor into your decision.
You’ll pay closing costs again. Mortgage refinance closing costs typically run 2-6% of your outstanding principal balance. If you still owe $200,000 on your home, that’s $4,000 to $12,000 in fees.
It can take a while to break even. Depending on your loan terms, it might take a few years to break even. (That’s especially true if you opt to pay mortgage discount points.) If you’re thinking about moving in the next few years, consider if it’s worth it to refinance right now.
Getting a new mortgage can temporarily lower your credit score. It’s a small dip, but applying for a mortgage typically lowers your credit score by five points or so. If you’re rebuilding your credit or planning on applying for another loan soon, a refinance could be a short-term setback.
You might have a prepayment penalty. Some, but not all, lenders charge a fee if you pay off your loan in full before a certain date, typically the first three to five years.
If a lender is advertising a “no closing cost refinance,” approach it with some healthy skepticism. You’ll still pay those fees in one way or another. Some lenders charge a higher interest rate to offset the cost. Others roll closing costs into your loan, and you’ll pay interest on them over time.
Should you refinance multiple times?
That depends on your current budget and your future plans. If you plan on staying in your house for a while, it can make financial sense to refinance more than once. But if you’re thinking of moving, it’s wise to pause and consider if a refinance is the right idea.
Just like when you got your first mortgage, it pays to shop around. Getting quotes from at least three different lenders can save you thousands and help you get the best rate.
