How Soon Can You Refinance a Mortgage?

Refinancing can be worth considering — especially if it lowers your monthly payments, reduces your interest rate or allows you to access home equity for major expenses. But how soon can you refinance a mortgage? The answer varies by loan type. Understanding the rules can help you decide whether refinancing is right for you.

Key takeaways

• Some loans allow you to refinance right away, while others have waiting periods.
• Refinance waiting periods can vary by lender and refinance type — you’ll wait longer to qualify for a cash-out refinance than for a rate-and-term refinance.
• Refinancing soon after buying a home may make sense if it lowers your payments or mortgage rate.

At a glance: How soon can you refinance a mortgage?

While some loan types allow you to refinance immediately, others have a waiting period or “seasoning” requirement. The seasoning rules can also depend on the type of refinance you’re getting, such as a rate-and-term refinance or a cash-out refinance.

Here’s a quick breakdown of each:

• Rate-and-term refinance: A rate-and-term refinance does what it sounds like — it helps you change your mortgage rate or repayment term. It’s sometimes referred to as a “no cash-out refinance.”
• Cash-out refinance: Cash-out refinancing involves replacing your existing mortgage with a bigger one and pocketing the cash difference to use as you wish.

How soon can you refinance a conventional loan?

Refinancing a conventional loan is generally the most straightforward option, since you can typically refinance at any time. The rules are different for a cash-out refinance, though — you’ll need to own your home for at least six months before refinancing. You may also have a waiting period if you want to refinance with the same mortgage lender.

How soon can you refinance an FHA loan?

FHA loans are government-backed mortgages insured by the Federal Housing Administration. They have more flexible refinance requirements than conventional loans, making them a popular choice for borrowers with lower credit scores.

You’ll typically need to show at least six months of on-time mortgage payments to qualify for an FHA refinance. For an FHA cash-out refinance, you generally must wait 12 months after buying the home before applying for a refinance.

How soon can you refinance a VA loan?

The U.S. Department of Veterans Affairs insures VA loans for eligible military members and surviving spouses. You can typically refinance a VA loan 210 days after making the first payment on your current loan or after six on-time payments. This rule applies whether you’re getting a VA rate-and-term refinance, VA cash-out refinance or VA interest rate reduction loan (IRRRL).

How soon can you refinance a USDA loan?

USDA loans, backed by the U.S. Department of Agriculture, generally require at least 12 months of on-time payments before you can apply to refinance. The USDA doesn’t offer cash-out refinancing.

Should I refinance soon after buying a home?

Refinancing shortly after buying a home can come with drawbacks, such as closing costs and a potential dip in your credit score due to the mortgage lender making a hard inquiry on your credit report. However, it may still be worth considering in certain situations.

Here are some examples of when refinancing might make sense:

 You’ve had an unexpected life change: Major life events, like a divorce, can drastically impact your finances and living situation. You may want to consider refinancing to remove your ex-spouse from the mortgage and potentially lower your monthly payments.

 You could secure a lower interest rate: If mortgage rates have dropped since you purchased your home, refinancing could help reduce your payments and the interest you’ll pay over the life of the loan.

 You could get rid of mortgage insurance: If your home’s value has increased enough to reach 20% equity, refinancing may help you get rid of private mortgage insurance (PMI).

 Your credit has improved: If your credit score has increased significantly since you bought your home, refinancing could save you money on monthly payments and interest over time. Be sure to compare the cost to refinance with the potential savings.

 You want to make a major purchase: A cash-out refinance allows you to tap your home equity to fund big expenses, like home improvements, repairs or college tuition.