How Long After Purchasing a Home Can You Refinance?

Refinancing can help lower a homeowner's interest rate.

At Least One Year

According to the Home Buying Institute, most lenders will not refinance a mortgage if the loan is less than a year old. After that it depends on the lender.

Eighteen Months to Two Years

Mortgage News Daily recommends waiting at least a year and a half to two years before attempting to refinance. The website claims that a homeowner can theoretically get a new home loan before then depending on the lender, but refinancing fees and mortgage insurance will eat up any possible financial gains.

Bottom Line

You can refinance as soon as a year after purchasing a home, but whether to refinance depends on how long you plan to stay in the home. Don Taylor, writer for Bankrate.com, indicates that the average closing cost in 2008 for a $200,000 loan was $3,118 before taxes and insurance. Refinancing early will pay off only if you plan to stay in the home long enough to recoup those expenses.

References

• Home Buying Institute: How Soon Can You Refinance a Home After Buying?
• Mortgage News Daily: How Soon Can I Refinance After Purchasing a House?
• Bankrate.com: When to Refinance Your Mortgage