How Often Can You Refinance Your Home? A Practical Guide
This practical guide provides a comprehensive overview of refinancing your home loan, and outlines how often you can pursue this tactic to save money. Learn the essential information you need to know before making the decision.
How Often Can You Refinance Your Home? A Practical Guide
Refinancing your home loan is an excellent way to save money each month and make sure you're getting the best terms possible. But how often can you really refinance your home? How long do you have to wait between refinances?
The answer to this question depends on many factors, including the type of loan you have, your credit score, and your economic situation. In this guide, we'll cover everything you need to know about how often you can refinance your home, so you can make an informed decision.
When Can You Refinance?
Generally speaking, you can refinance your home whenever you have enough equity in the property to cover the costs of the new loan. You'll usually need to wait at least six months after taking out your original loan before you'll qualify for a new loan. That six-month period gives lenders enough time to make sure you're making payments on time.
The six-month rule doesn't apply if you've had your loan for more than one year. In that case, you should be able to refinance at any time. However, you may have to pay a prepayment penalty if you do so.
How Often Can You Refinance?
The frequency with which you can refinance depends on several factors. Generally, you'll be able to refinance at least once a year, though some lenders may be willing to work with you to refinance more often if you demonstrate that it will save you money in the long run.
If you have an adjustable rate mortgage (ARM), you may be able to refinance more frequently. Your lender may give you the option of extending your loan terms when you refinance. This allows you to lower your payment and keep more of your cash in your pocket.
When Is Refinancing a Good Idea?
Refinancing may be a good option if interest rates have fallen since you took out your original loan. This could lower your monthly payment or reduce the total cost of the loan. Refinancing also allows you to switch from one type of loan to another, such as an ARM to a fixed-rate loan.
Refinancing is also an option if you need to access some of the equity in your home. Homeowners can often take out equity loans to use for major home repairs, home renovations, or anything else that requires substantial funds.
The Bottom Line
Refinancing your home can be an excellent way to save money and get a better interest rate. However, it's important to understand how often you can refinance and when it's a good idea. If you're considering refinancing, consult with a qualified financial advisor who can help you determine the best course of action.