How soon can you refinance your home?

Question

How soon after your first mortgage payment can you refinance your home? 1 year? 3 years? 5 years?

I'm unsure of the variables so here is a sample scenario.

$350,000 home. 10% initially put down ($35,000)
30 Year fixed mortgage + PMI

Thanks! Best answer will get 10 points.

Answer 1

Several factors play a role....
1.) Do you have a prepayment penalty? These penalties are monstrous and you'll want to wait until the prepay has expired.

2.) What are your goals? Are you looking to pull cash out or just get rid of that nasty MI? If you're looking to pull cash out, wait 1 year. If you're looking for better loan terms, you can refinance within 3 months, BUT...

3.) ...value has to be there. In other words, the house needs to appraise to the necessary value in order to get the loan terms you want.

Example - You owe $315,000 on a $350,000 home. Your loan amount to home value ratio is at 90%. In order to get rid of your MI, the home would need to appraise at $400,000 ($394,750 + $5250 fees) in order to refinance.

Answer 2

As soon as you want. Just know that you may have a prepayment penalty with the first company. You will have to watch out for the fees of the next company also and your house has probably not increased in value and you have not dropped the principal.

You would need to take into consideration how much, additional, the re fi would be with and without a prepayment penalty. Usually, this is any payment that exceeds 20% of the original loan amount. 63k is safe. 252k IS the base for a prepayment penalty. Rather than choose a company for its rate and payment, decide how long you want to be in debt and how much you want to pay back to the company.

There is a company I work with where there is no escrow- we set you upas your own escrow com., no PMI/MIP, no balloon payments, fixed rate only, equity building right fromthe begining, no cash at closing, andis "the last loan you will ever need." By paying monthly, your loan would be paid off in 27 years and five months.

Answer 3

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RE:
How soon can you refinance your home?
How soon after your first mortgage payment can you refinance your home? 1 year? 3 years? 5 years?

I'm unsure of the variables so here is a sample scenario.

$350,000 home. 10% initially put down ($35,000)
30 Year fixed mortgage + PMI

Thanks! Best answer will get 10 points.

Answer 4

I am guessing that you want to pay off that PMI. True, you should be concerned about prepayment penalty, but also closing costs. How much did you pay in the Purchase and how much do you have to pay for the refi. Be aware of those who will strip the equity from your house. IE we will roll your costs into the loan, now your loan is at $320,000 instead of $315,000.
You could get rid of the PMI by adding a HELOC and paying down your first with it. Bring the LTV (Loan to Value) down to 78% and the investor will remove the PMI. The only hitch there is you are still paying the same PITI (payment Principal Interest Taxes and Insurance). Depending on your rate and these costs you might want to refi into this type of scenario, or do it on your own.

Answer 5

The day after you close if you wanted to. There's no minimum time.

Some mortgages have a pre-payment penalty that you'd need to factor into the calculations to see if refinancing is a good idea. The pre-payment penalty won't bar you from refinancing but will increase your cost of refinancing.

Answer 6

It depends on the terms of your mortgage. Some mortgages have a pre-pay penalty, which means you have to stay with that company for a certain amount of time. They can be 2 years, 5 years, whatever. Call your lender and ask them if your mortgage has a pre pay penalty. If not, you can refi whenever you want.

Answer 7

you can't beat a fixed mort, but it depends on the rate of Int. if its 6.25 or under, stick with it. you can refi any time you please, but remember, some loans have prepayment penalties in them if b4 1-2 yrs. read it carefully.
additionally, it'll cost you more to buy the loan then the interest drop for a new fixed rate if you plan to recover same in 10 yrs.
if you need $$ get a heloc for a short term if your present term is great...then you have control

Answer 8

depending on the program some have prepayment penalties etc.......as well when you refinance a house if youve lived there and the contract date is less than one year you must go off the purchase price to figure the loan amount..........most times it is beneficial to wait one year plus one day in order to take full advantage of the equity built up in your property