After purchasing a new home how soon can you refinance for a lower interest rate?

Question

I'm a contractor overseas debating whether I'll be here 6 months or a year. When I get back to the states I'll be making pretty good money but not as much as I am as a contractor so I would like my mortgage payment to be lower.

Answer 1

depends on what your terms are with your mortgage company, some have pre-payment penalities you need to check with them on that.

Love Ya
PoPtArT

Answer 2

Not all lenders include prepayment penalties, but there are other reasons you may not be able to, or want to, refinance.

For one thing, many lenders will lend 100% loan-to-value on purchases, but not on refinances. You may only be able to borrow 90% or 95%, and it takes a while to accrue any equity in the beginning of a loan term. Your payment is mostly interest in the beginning, so the principal reduction is very small. Of course, if you made a nice down payment, this isn't a consideration.

Another thing is you'll have to pay the closing costs again. Depending on your location and the value of your home, that can be a significant determining factor.

Plus, the rates are creeping up in many cases. You may not be able to get a better rate than you already have, and since the principal hasn't reduced much, your payment could very well be higher than you already have.

You'll probably need to wait about a year before refinancing does you any good.

Answer 3

wait at least a year to refinance...one of the things they look at is if you're making your payments on time on the current loan. Also, make sure you have a better credit rate than you did when you got the loan initially. Making more money only plays a small factor in getting approved for loan at a lower interest rate. you could be making 6 figures a year and still won't get approved for loan b/c you have a poor credit.

Answer 4

You are not required to wait for equity to build in the home before refinancing your current mortgage. However, most home owners do wait until they have some equity in their homes before refinancing. When making loan decisions, one of the most important factors potential lenders review is the loan-to-value ratio, or LTV, of the proposed loan. This ratio compares the amount of the loan you are trying to obtain to the current value of your home. However, if your credit score has increased significantly since you first purchased your home (or if your income has risen), you may be able to obtain a lower interest rate.

You should contact several potential lenders to discuss the loan terms they can offer you on a refinance loan. After speaking with several lenders, you should be able to determine whether or not a refinance loan is a financially viable option for you.

If you want an introduction to pre-screened mortgage lenders, Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the loan page and find a loan that meets your needs at: https://www.bills.com/mortage/refinance

Another problem encountered by many borrowers trying to refinance their home loans are early refinance penalties charged by their current lenders. Many loan agreements, especially “sub-prime” loans designed for borrowers with credit problems, state that borrowers must pay a penalty to their current lender if they wish to refinance their loan before the expiration of a certain period defined by the loan agreement. These “penalty periods” vary from loan to loan, but are frequently between two to five years from the date of the original mortgage. Before you attempt to refinance your current mortgage, you should contact your current lender to discuss whether or not your current loan agreement includes a prepayment penalty, and if so, its amount and when you can refinance without penalty. These penalties can be quite costly, and can easily make a refinance loan too expensive to save you money over your previous loan. Again, you should find out the amount of the penalty, if any, on your current loan, then contact several potential refinance lenders to discuss whether or not a refinance loan is a practical solution for you.

To learn more about refinance loans, I encourage you to visit the Bills.com Home Refinance Information page at http://www.bills.com/home-refinance

If you enter your contact information in the Bills.com Savings Center at the top of the page, we can have several pre-screened lenders contact you to discuss the refinance options available to you.

Answer 5

It depends on the original loan. Some loans have it written into the contract that you cannot look to re-finance for a set amount of time. Check the contract.

Answer 6

You can do it the next day, although it would rarely be sensible to do so. It costs several thousand dollars to re-finance a mortgage.

Answer 7

i thing it is about 5 years so the house can grow some interns

Answer 8

new loans these days almost all have anti-refi clauses -- nasty penalties you pay if you do refi.

you'd best check for them and look out for how long they are.


GL