How Long it Takes to Refinance A Mortgage After Purchase?
“Sooner than you think,” could be the answer. Refinancing quickly after going through the procedure and paying closing costs on your original mortgage may seem silly. But in some situations, it can save you a lot of money over the life of the home loan. In most cases, there is a wait time.
The wait time depends entirely on some primary factors such as;
- The type of refinance program
- The type of home loan
- if any sanctions are imposed
It is important to note that although you can legally refinance right away, certain lenders may require you to wait months before doing so with the same lender.
REFINANCING RULES AND TIME FRAMES TO CONSIDER.
- A cash-out refinance, in which you borrow additional funds against your home equity, usually has a six-month waiting period (and you presumably don’t have that much equity invested in that short amount of time anyhow).
- You may be required to wait up to 24 months before refinancing if you entered into mortgage forbearance or had your initial loan restructured to allow you to skip or temporarily lower monthly payments.
- If you wish to refinance your mortgage using an FHA Streamline Refinance, you will have to wait 210 days from the original closing date.
- Even if your home loan interest rate is only substantially higher than today’s, a little reduction in your rate might save you thousands of dollars over the course of your loan. If you refinance now rather than later, when rates may not be as low, you will gain more long-term benefits.
- If you refinance your loan within the first three to five years, several loan packages contain prepayment penalties.
Take Your Credit Score into Consideration
Buying a house can have an impact on your credit score.
And if you have just had your home for a short time, you probably have not made enough monthly payments to improve your credit score yet.
If you apply for a refinance loan soon after, your credit record will be sniped again, potentially affecting your eligibility.
This could make getting a new loan to replace your previous one difficult, or it could lower the rate you are offered.
If the timing is right, refinancing is well worth it, and when you work with an experienced and professional loan officer, it can be a simple and straightforward procedure.
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