In theory, you can refinance your home as often as you can get a lender to approve a new loan. Many states require you to wait a minimum period between refinances (this is called "seasoning"). States may also require you to get a “net tangible benefit” from refinancing. This means you need to get a real benefit from refinancing, such as significantly reducing your interest rate. But otherwise you are free to refinance your home as many times as you like when you meet the lender’s credit, income, and financial standards.
In practice, you only want to refinance when it makes sense. You will likely pay closing costs each time you refinance so you want to make sure paying those costs are worthwhile by getting a better rate or better terms. If you have refinanced before, you’ll also want to think about your "break-even" point – which is the moment when the savings you get from refinancing are equal to the closing costs you pay.
For example, say by refinancing you saved $100 a month on your mortgage and paid $1,500 in closing costs. This means you will "break even" at 15 months and start saving money at 16 months. In this case, refinancing again before 15 months have passed will cost you money. Also keep in mind the longer you save $100 a month, the more money you might save over time.
As a result, look at the costs and benefits each time you refinance your mortgage. There is usually no limit on how often you can refinance. There is no right or wrong number of times to refinance. There is just the number of times refinancing makes financial sense for you.
How often can you refinance a conventional mortgage?
You often have to wait six months before you refinance a conventional loan. In some states, you may have to wait more than six months. You may need to get a net tangible benefit too, which can also affect how soon you refinance. That’s because net tangible benefit can depend on current interest rates being significantly lower than the rate you have on your mortgage right now. If today’s rates aren’t much lower than the rate on your mortgage, you may have to wait.
Just like with any refinance, compare the value of refinancing against the closing costs and decide if it is a good choice. There are no limits on the number of times you can refinance.
How often can you refinance a VA loan?
There is no limit on how often you can refinance your house with a VA loan. You are usually limited to financing one house at a time with a VA loan. See our article on your VA loan entitlement to learn more.
You are required to wait six months if you want to refinance a VA loan using the streamline program. To qualify for streamline refinancing, you typically need to be current on your mortgage payments and have a recent history of paying your monthly mortgage bill on time. You’ll also need to get a real benefit from refinancing by lowering your rate or improving your terms. Learn more about VA streamline refinancing.
How often can you refinance an FHA loan?
There are no limits on how often you can refinance with an FHA loan. FHA loans also have a streamline program that requires six months of seasoning. To qualify for FHA refinancing, you need to be current on your mortgage payments, have a recent history of paying your monthly bills when they are due, and receive a real benefit from refinancing. Learn more about FHA streamline refinancing.
Ask Freedom Mortgage about refinancing
Freedom Mortgage is the #1 VA and #1 FHA lender1 in the United States. We offer refinancing on conventional, VA, FHA, and USDA loans. To speak with one of our loan advisors about whether you should refinance your mortgage, please call 877-220-5533 or Get Started online.
1. Inside Mortgage Finance, January to September 2020