How Soon Can You Refinance a Mortgage?
You can refinance a mortgage immediately in some cases, but many loans require a waiting period ranging from six to 12 months, depending on your loan type. You can also refinance multiple times, as long as you meet lender requirements and the savings outweigh the costs.
- 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.
- You can refinance more than once, but it only makes sense if the financial benefits outweigh the costs.
Mortgage refinance timelines and rules by loan type
Refinance waiting periods, also called seasoning requirements, vary by loan type and the kind of refinance you choose. In general, rate-and-term refinances have shorter timelines than cash-out refinances, and you can refinance more than once if you meet the requirements.
Types of mortgage refinancing
- Rate-and-term refinance: Replaces your current mortgage with a new one to change your mortgage rate or loan term, without taking cash out.
- Cash-out refinance: Replaces your existing mortgage loan with a larger one, allowing you to take the difference in cash to use for expenses like home improvements, debt consolidation or major purchases.
| Loan type | How soon can you refinance? |
|---|---|
| Conventional loan |
|
| FHA loan |
|
| VA loan |
|
| USDA loan |
|
| Jumbo loan |
|
How soon can you refinance a conventional loan?
A traditional refinance of a conventional loan is generally the most straightforward option, since you can typically refinance at any time. If you refinance with the same lender, it may require a waiting period.
If you’re doing a cash-out refinance, you’ll need to wait at least six months before refinancing.
How soon can you refinance an FHA loan?
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.
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.
Compare current FHA loan rates with LendingTree.
How soon can you refinance a VA loan?
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).
The U.S. Department of Veterans Affairs insures VA loans for eligible military members and surviving spouses.
Compare current VA loan rates with LendingTree.
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.
USDA loans are designed for lower-income borrowers who are purchasing homes in designated rural areas across the country.
See LendingTree’s guide on using the USDA eligibility map to check if your home qualifies for a USDA loan.
How soon can you refinance a jumbo loan?
You can generally refinance a jumbo loan at any time. Jumbo loans are conventional mortgages that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA).
One caveat: Jumbo loans are typically harder to qualify for than conventional loans. If your financial situation has worsened since buying your home, you may have trouble qualifying for a jumbo refinance loan.
See LendingTree’s guide on jumbo loans versus conventional loans.
When should you refinance your mortgage?
Refinancing your mortgage makes sense when it provides a clear financial benefit, such as lowering your monthly payment, reducing your interest rate or helping you meet a specific financial goal.
Here are some examples of when refinancing might make sense:
- You could secure a lower interest rate: If mortgage rates have dropped since you purchased your home, refinancing could help reduce your monthly payment and total interest costs.
- Your credit score has improved: Better credit can help you qualify for lower rates and better terms.
- You want to shorten your loan term: If your income has increased and you can afford to pay off your mortgage sooner, it might make sense to refinance into a shorter-term mortgage (for example, from a 30-year to a 15-year loan).
- You could get rid of private 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) sooner.
- You need to finance a major expense: A cash-out refinance lets you use your home equity for things like home improvements, repairs or college tuition.
- You need to switch loan types: For example, refinancing can allow you to switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan or from an FHA loan to a conventional loan.
- You’ve had a major life change: Events like divorce or income changes may make refinancing a smart move.
Should you refinance soon after buying a home? Refinancing shortly after buying a home can make sense if rates drop, your credit improves or your financial situation changes. However, you’ll need to weigh the closing costs and potential credit impact against the savings.
Even a small drop in interest rates can make a difference. LendingTree data shows homeowners may save $82 to $151 per month and up to $29,000 to $54,000 over the life of a loan by refinancing to a lower rate.
How often can you refinance a mortgage?
You can refinance your mortgage multiple times. There’s no legal limit on how often you can do it. However, most lenders require you to wait a certain amount of time between refinances, typically at least six months, depending on your loan type and lender.
What to consider before refinancing your mortgage again:
- Closing costs: You’ll be expected to pay a new set of refinancing costs, often totaling thousands of dollars
- Break-even point: It takes time to recover closing costs through monthly savings
- Credit and income requirements: You’ll need to qualify for a new loan each time you refinance
- Prepayment penalty: This penalty is uncommon, but review your loan agreement to make sure you won’t be charged for paying off your mortgage early
To decide if refinancing again is worth it, calculate your break-even point:
Closing costs ÷ monthly savings = months to break even
For example, if refinancing costs $4,000 and saves you $100 per month, it will take 40 months to break even.
Frequently asked questions
Refinancing your home can be worth it if it lowers your monthly payment or interest rate, or helps you meet a financial goal. However, it’s important to weigh the savings against the costs. One way to do this is by calculating your break-even point — the time it takes for your savings to cover the closing costs.
You don’t always need 20% equity to refinance. Depending on the loan type and lender, you may qualify with as little as 3% to 20% equity. However, having at least 20% equity can help you avoid mortgage insurance and qualify for better terms.
Refinancing can temporarily lower your credit score due to the hard inquiry from applying for a new loan. However, the impact is usually minor and short-lived, especially if you continue making on-time payments.
Refinancing can come with downsides, including closing costs, resetting your loan term and potentially paying more interest over time. It may also temporarily lower your credit score and require you to meet new qualification standards.