How Often Can I Refinance My Mortgage?

Rates continue to stay at all-time lows, which means that many homeowners take advantage of refinances to lower rates and access their growing equity. If you refinanced before COVID-19 and have a high-interest rate, you may benefit from refinancing.  

One of the common questions we hear from these kinds of borrowers is, “How often can I refinance?” This question has a few different answers and will depend entirely on your specific circumstance. Let’s break it down:

What’s Your Refinance Goal?

Is your goal to pull out cash, reduce your term or pay less in interest? Your plan of refinancing will be the first thing you want to take a look at. Let’s look at an example:

If you refinanced over a year ago and have an extremely high-interest rate due to bad credit, it may make a lot of sense. You have had time to let your healthier credit habits season, and you the market may have better interest rates than your refinance, it may make sense.

Check The Fine Print

Check the fine print of your mortgage. You may have to satisfy certain conditions before refinancing your loan. Without addressing these, you could pay large fees/eligibility issues and offset the new mortgage’s benefit. These items can include:

  • 2nd mortgages
  • Pre-payment penalties
  • Mortgage Forbearance  

Checking on these items before proceeding with a refinance will ensure you aren’t left in a bad spot right before closing.

There Is No Such Thing As A “No-Cost Mortgage”

A significant part of the decision-making process is the cost of the refinance. While most fees and loan costs can be rolled back into the loan, this doesn’t make it “free.” You need to make sure that the loan’s price doesn’t exceed the benefit you will get from refinancing.

Refinances Before The 6 Month Mark

Many lenders will advise waiting a minimum of 6 months before doing another refinance. The main reason is that while you may not have a pre-payment penalty, the lender you loan will have one. These are called “EPO’s” and can be frustrating for the lender while they are not common. The other reason is that a refinance cost will usually outweigh any benefit you can get from refinancing that quickly. Don’t be afraid to ask your lender to show you a comparison before refinancing that quickly.

A refinance can help you achieve many of your financial goals and is something that we can help thousands of homeowners with every year. Looking to see what your options are and how a refinance could benefit you? Click here and get started today!