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How Soon Can You Refinance a Mortgage?

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Tags: Refinancing, Digital Home Lending, Fixed Rate, Mastering Mortgages

With 2020 ushering in some of the lowest mortgage refinance rates in history, it's not uncommon to hear the question: "how soon can you refinance a mortgage?" You may be surprised to learn that with certain loan and refinance options require no downtime before refinancing. How long you'll need to wait will largely depend on the type of mortgage loan you have and the refinance option you plan to use (cash out vs. streamline).

Let's dive into the question, "how soon can you refinance a mortgage?" by breaking down the different types of mortgage loans, refinancing options, and what the requirements are for both to refinance.

How Soon Can You Refinance A Mortgage Based on Loan Type

Conventional Mortgage Loan

A conventional loan is a mortgage loan backed by Fannie Mae or Freddie Mac. Generally, conventional loan rules allow borrowers to refinance immediately after closing. If you plan to immediately refinance after you close on your home, be sure to check with your lender to see if they allow immediate refinances, as some lenders require their borrowers to wait 180 days (6 months) before refinancing. Of course, this can be avoided by shopping around to different lenders. Be sure to compare mortgage rates before doing so to make sure you're getting the best deal!

FHA, VA or USDA Mortgage Loan

FHA, VA and USDA loans are government-backed mortgage loans. Rules for these government-backed loans differ from conventional loans, requiring borrowers to wait six months before qualifying for a refinance. On the bright side, borrowers with government-backed loans have access to a special home loan refinance option known as the streamline refinance, but we'll get to that later.

What Are My Refinance Options? 

Cash Out Refinance

A cash out refinance allows the borrower to refinance their home loan, taking their home's equity back in the form of cash. This can be beneficial for borrowers who want or need to tap into their home's equity to pay for large expenses, consolidate debt or use as an investment. Cash-out refinances typically require the borrower to wait six months (conventional loan) or make six consecutive payments (government-backed loan) before becoming eligible to begin the refinance process since it takes time to build equity in the home to actually "cash out" on. While cash-out refinance options vary from lender to lender, Wyndham Capital offers 10, 20 and 30-year cash-out refinances with some of the industry's most competitive cash-out refinance rates.

Streamline Refinance

Streamline refinancing is only available for borrowers with FHA or VA loans, acting as a "financial shortcut" that helps lower your monthly payment, interest rate or both. While borrowers with government-backed loans are required to wait at least six months before applying for a streamlined refinance, they can be done more quickly than a cash-out refinance. For instance, streamline refinancing requires minimal credit requirements, asset and income verification, waived appraisals and faster loan processing. What's more, when you work with digital mortgage lenders like Wyndham Capital, you'll save on closing costs and enjoy a lightning speed refinance without ever stepping foot inside a bank.

Borrowers must meet specific criteria before applying for a streamline refinance, including:

  • Make at least six consecutive, on-time payments on your current FHA mortgage.
  • Wait at least six months before the first payment due date.
  • Allow (at least) 210 days to pass from the FHA-insured mortgage's closing date being refinanced.

How soon can you refinance a mortgage is an important question. Another essential question is knowing when to refinance a mortgage. No matter where you are on your home loan journey, Wyndham Capital Mortgage has the tools, knowledge and know-how to guide you through the tough mortgage and refinancing questions that come to mind, day or night. Whether you need a free mortgage calculator to start planning your next move or a helping hand in deciding what type of refinance option is the best choice for you, our expert mortgage loan officers are ready to help.

Contact Wyndham Capital Mortgage today to get started on this next chapter in your home loan journey.

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