You might be surprised to learn that there are no regulations that govern how often you can refinance your home mortgage. Some lenders may have their own rules about the length of time you have to own your home, but technically, you can refinance as often as you like. You should probably focus on the benefits you might gain from refinancing and not the amount of time that has elapsed since you last applied for a mortgage.
What to Consider Before You Refinance
With that in mind, you need to figure out if it makes financial sense for you to replace your old mortgage. These are some of the things that you might want to consider before you decide if you should refinance your house or not:
- Closing costs: Refinancing isn’t free. You will have closing costs just like you did when you got your first mortgage. It might be possible to roll these expenses into your loan, so you don’t need to come up with cash, but it’s still something to consider.
- Fees for paying a mortgage off early: Some mortgages may come with a fee for paying a mortgage off before a specified time period. This isn’t that common, but you might want to read your original mortgage papers to find out if your lender has one of these fees.
While you may not have to wait a certain amount of time to refinance, there might be good reasons to wait. For example, people who have more equity in their home are likely to qualify for more loan choices and enjoy a better interest rate when they do. You should also account for the costs of refinancing to make certain that this action will really save you money in the long run. The amount of time that it will take to recoup closing costs might be another consideration. If you don’t plan to stay in your house very long, you might not have your mortgage long enough to benefit.
Should You Ever Refinance Soon After You Closed Your Last Mortgage?
Is it too soon to refinance? The right answer really depends upon the loans that you can find and the reasons that you think refinancing is a good idea. If you can find a good deal, lower payments or a chance to cash out your equity might help your financially. If you shorten your 30-year-mortgage to a 10-year mortgage, you might be able to get your home paid off a lot faster. You might talk to a broker to find out what kinds of programs that are available to you to see if this is a good time for you to apply for a new mortgage.