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- There’s no limit on the number of times you can refinance your mortgage.
- Some lenders require a “seasoning” period, or an amount of time after closing on your current home loan before you refinance, which is typically six months long.
- If you have a government-backed mortgage, then you must wait at least six months after closing before refinancing.
- When considering refinancing, think about closing costs and whether you can meet lenders’ stricter requirements during the coronavirus pandemic.
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Mortgage rates are at historic lows right now, which could have you thinking about refinancing. But if you’ve already refinanced your mortgage, are you allowed to do so again?
Or, if this is your first time refinancing, you might be worried you’re jumping the gun. Should you risk refinancing now only to be forbidden from refinancing again later?
How often can you refinance your house?
There’s no legal limit to how many times you can refinance your home, so you don’t need to worry about “using up” your chance to do it.
The number of times you refinance may not be a concern, but there are some other factors to consider before taking the plunge.
For example, some lenders may require you to wait a certain amount of time before refinancing, or you may find out that refinancing right now isn’t the best move for your financial well-being.
Some lenders require a seasoning period
Some lenders may let you refinance immediately after closing, should you choose to. Others require a “seasoning” period, which is a certain amount of time after you close on a home loan before you can refinance. A seasoning period applies to either your initial mortgage or to your most recently refinanced mortgage.
Not all lenders have seasoning periods, and for those that do, there’s no universal rule about how long a seasoning period lasts. But the general rule of thumb is that a seasoning period is six months long.
There’s a way to work around seasoning periods, though. If your lender won’t let you refinance yet, then you can simply try to refinance with a different company.
The strictest rule about seasoning periods is with government-backed mortgages, which includes FHA, VA, or USDA loans. If you have a government-backed loan, then you must wait six months after closing to refinance.
Things to consider before refinancing
Just because you can refinance right now doesn’t necessarily mean you should. Here are a couple key things to think about before moving forward:
The process could be more complicated during the coronavirus
Yes, rates are low due to the global pandemic — but the pandemic is also making the refinancing process more difficult. Many lenders are requiring higher credit scores, and you may not qualify to refinance if you’ve lost work, even if it’s through no fault of your own.
Because lenders are slammed with refinancing applications right now, you also may have to wait longer than usual to complete the process.
Be sure refinancing will actually work in your favor
There are many reasons to refinance. Maybe you want to lock in a lower rate, switch to lower monthly payments, or tap into your home equity for cash.
Remember that when you refinance, you have to pay closing costs all over again. Closing costs will vary depending on your home and where you live, but the average cost of refinancing closing costs in the US is $5,779 (although they vary by state).
If you’re snagging a significantly lower rate by refinancing, for example, then your savings could outweigh closing costs. But if your rate will only be lower by a tiny fraction of a percentage point, then refinancing could actually cost you money.
Before you refinance, crunch the numbers to be sure this is the right decision for your finances.
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