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- There's no limit on the number of times you can refinance your mortgage.
- If you have a conventional loan, you may be able to refinance right away – though some lenders and loans have six-month waiting periods.
- If you have a government-backed mortgage, you may need to wait up to a year before you can refinance.
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Refinancing can help you achieve a lot of different financial goals, such as lowering your monthly mortgage payment, shortening your loan term, or boosting your home's value with upgrades paid for with the equity from a cash-out refinance.
But if you've already refinanced your mortgage, are you allowed to do so again? Or, if this is your first time refinancing, you might be worried you're jumping the gun. Should you risk refinancing now only to be forbidden from refinancing again later?
How often can you refinance your home?
There's no legal limit to how many times you can refinance your home, so you don't need to worry about "using up" your chance to do it.
The number of times you refinance may not be a concern, but there are some other factors to consider before taking the plunge.
For example, some lenders may require you to wait a certain amount of time before refinancing, or you may find out that refinancing right now isn't the best move for your financial well-being.
Some lenders and loan types require a waiting period
It's not so much a question of how often can you refinance your home, but how soonyou can refinance.
Depending on your mortgage refinance lenderand the type of refinance you're looking to do, you might need to wait between six months to a year to refinance.
If you have a conventional mortgage and you want to refinance into a new rate or term with no cash out, some lenders may let you refinance immediately after closing, should you choose to. Others require a "seasoning" period, which means you have to wait a certain amount of time after closing on a mortgage before you're able to refinance it.
Not all lenders have seasoning periods, and for those that do, there's no universal rule about how long a seasoning period lasts. But the general rule of thumb is that a seasoning period is six months long.
There's a way to work around seasoning periods, though. If your lender won't let you refinance yet, then you can simply try to refinance with a different company.
The rules are different if you aren't doing a rate-and-term refinance. If you want to take equity out of your home with a cash-out refinance, you'll need to wait at least six months after closing.
If you have a government-backed mortgage, such as an FHA, VA, or USDA loan, you'll likely need to go through a waiting period before you can refinance. With FHA mortgages, for example, borrowers must wait at least 210 days to get a streamline refinance. For FHA cash-out refinances, they need to have owned their home for at least 12 months. VA borrowers must wait at least 210 days to refinance, and USDA borrowers have to wait 12 months.
Things to consider before refinancing
Just because you can refinance right now doesn't necessarily mean you should. Here are a couple key things to think about before moving forward:
You'll pay closing costs again
Like you did with your original loan, when you refinance your mortgage, you'll incur closing costs. Average refinance closing costs in 2021 were $2,375, according to ClosingCorp. Exactly how much you'll pay will depend on where you live and the details of your transaction.
Whether paying closing costs makes sense depends on your goals and whether you'll be able to save money with your new loan. If you're snagging a significantly lower rate by refinancing, for example, then your savings could outweigh closing costs. But if your rate will only be lower by a tiny fraction of a percentage point, then refinancing could actually cost you money.
You could be taking on a higher rate or longer term
Before you refinance, crunch the numbers to be sure this is the right decision for your finances.
Mortgage rates rose significantly last year and are still relatively high. If you bought your home or last refinanced when rates were at historic lows, it probably doesn't make sense for you to refinance at the moment.
But if you currently have a high rate and believe you could get a lower rate with a new mortgage, refinancing could lower your monthly payment and reduce the amount of interest you'll pay over the life of your loan.
It's also possible to reduce your monthly payment by refinancing into a loan with a longer term. While this can give you more room in your budget on a monthly basis, you could also end up paying more interest in the long run.
If you're interested in paying off your mortgage faster and reducing the amount you pay in interest overall, you might consider refinancing into a shorter term, like a 15-year mortgage. But if you do this, be prepared to take on a higher monthly payment.
A cash-out refinance can help you pay for value-boosting upgrades, but it means giving up some equity
Equity refers to the portion of the home's value that belongs to you outright; it's the difference between what you owe on your mortgage and your home's total value.
If you plan to use a refinance to take cash out of your home, you should consider whether what you'll gain by doing so is worth the equity you'll lose.
Giving up equity isn't always a bad idea if you reinvest it into your home or use it to pay off high interest debt, but it can come with risks.
The less equity you have in your home, the more likely you could end up underwater on your mortgage if home values dip. A mortgage becomes underwater when the loan balance is higher than the home's value.
If you plan to sell your home soon, having equity can give you a cushion to help you cover the costs of selling and make a down payment on your next home. Without it, you could end up breaking even or even losing money on the sale.
Additionally, there are other ways to tap into your home equity that could be cheaper than refinancing. For example, home equity lines of credit, or HELOCs, let you borrow against the money you have in your home without getting a whole new mortgage.
Personal Finance Reviews Editor
Laura Grace Tarpley (she/her) is a personal finance reviews senior editor at Insider. She oversees coverage about mortgage rates, refinance rates, lenders, bank accounts, investing, retirement , and borrowing and savings tips for Personal Finance Insider. She was a writer and editor for Insider's "The Road to Home" series, which won a Silver award from the National Associate of Real Estate Editors. She is also a Certified Educator in Personal Finance (CEPF). She has written about personal finance for seven years. Before joining the Insider team, she was a freelance finance writer for companies like SoFi and The Penny Hoarder, as well as an editor at FluentU. You can reach Laura Grace at firstname.lastname@example.org. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services »
Molly Grace is a reporter at Insider. She covers mortgage rates, refinance rates, lender reviews, and homebuying articles for Personal Finance Insider. Before joining the Insider team, Molly was a blog writer for Rocket Companies, where she wrote educational articles about mortgages, homebuying, and homeownership. You can reach Molly at email@example.com, or on Twitter @mollythegrace.