Whether you’ve had your home a month or a year, you might be wondering, “How soon can I refinance after purchasing a home?” The short answer is – it depends. The waiting time (called seasoning) varies based on the loan you have and whether you want cash-out. Waiting time varies from 0 to 12 months from the date you closed on your original loan. And no matter what – you can’t have late payments. Read on to see how long you may need to wait to refinance.
Waiting Time for Different Loans
Depending on your loan type, the waiting period varies. For example:
- Conventional loans – you can do a rate-and-term refinance right away if you want, but typically not with the same lender. That’s because, before 6-months, the lender may lose their original commission. On the other hand, if you want a cash-out to refinance, you’ll have to wait for at least 6-months.
- VA loans – you’ll need to have made 6 payments or waited for a minimum of 210 days (whichever is longer).
- FHA – you’ll need to have made 6 payments before getting a rate-and-term refi. For a cash-out refinance, it’s 12 months.
- USDA – in most cases, you’ll need to wait until you’ve made 12 payments.
In addition, you’ll need to have made all payments on time during that waiting period (6 – 12 months). No late payments – that is a hard and fast rule. So, if you were late during that time, you’ll need to wait.
Refinance Sooner Than Later?
It’s a good idea to refinance when you can save a couple of hundred dollars a month on your payment. On average, we save our clients $300 a month when they refinance.
In addition, if your circumstances have changed since you got your last loan – for example, if your credit score increased or if your home’s equity has gone up substantially, it could make a big difference in your interest rate. You might also be able to get rid of your PMI.
According to Corelogic, in 2021 the average increase in equity was $55,300. And that’s two times higher than 2020. So you might have more equity than you thought.
Save Your Hard-Earned Money
We know how hard you work for your money. When you refinance with Homestead Financial Mortgage, not only can you save money every month on your mortgage payment – we have even better news.
It’s called NOOP (Nothing Out of Pocket). Unlike a purchase loan where you must come up with a down payment and closing costs – with a NOOP, you don’t have to pay for anything out of your pocket.
Homestead Financial Mortgage is a top mortgage lender for homebuyers looking to refinance or purchase a home. Our low-interest home loans are some of the best in the states we serve. We service Arkansas, Colorado, Florida, Illinois, Indiana, Kansas, Missouri, Ohio, Tennessee, and Texas. Contact us today to learn more about the home loan products we offer that are right for you.