When Can You Refinance a Mortgage?

By Mortgage Pipeline – Helping You Make Smart Mortgage Moves

Refinancing a mortgage can be a powerful way to save money, reduce monthly payments, or even shorten your loan term—but timing matters. Whether you're aiming to lower your interest rate, tap into home equity, or switch loan types, understanding when you can refinance is just as important as understanding why you should.

Here’s everything you need to know about when it’s the right time to refinance your mortgage.

How Soon Can You Refinance After Getting a Mortgage?

The answer depends on the type of mortgage you have and the type of refinance you’re pursuing.

Conventional Loans:For most conventional loans, you’ll need to wait at least six months after your original closing date before refinancing. However, some lenders may allow you to refinance earlier if you're not changing the loan term or if there's a significant financial benefit, like a major drop in interest rates.

FHA Loans:If you're looking to do an FHA Streamline Refinance, there’s a waiting period of 210 days from the original loan closing, and you must have made at least six consecutive on-time payments.

VA Loans:VA Interest Rate Reduction Refinance Loans (IRRRLs) also require six consecutive monthly payments, and 210 days must pass from the date of your first mortgage payment.

Cash-Out Refinancing:Cash-out refinancing typically has stricter guidelines. Most lenders require you to wait six months to a year from your original mortgage closing and demonstrate that you've built sufficient equity in your home—usually at least 20%.

Key Factors to Consider Before Refinancing

1. Your Credit Score:Lenders will recheck your credit when you refinance. If your score has improved since your original mortgage, you may qualify for a better interest rate.

2. Current Market Rates:One of the main reasons to refinance is to lock in a lower interest rate. If rates are trending downward and you plan to stay in your home for several years, refinancing could save you thousands over the life of your loan.

3. Your Home Equity:Having more equity in your home gives you access to better refinance options, especially if you're doing a cash-out refinance.

4. Closing Costs:Refinancing isn’t free. Make sure the long-term savings outweigh the upfront costs, which typically range from 2% to 5% of the loan amount.

5. Your Financial Goals:Are you looking to pay off your mortgage faster? Lower your monthly payments? Switch from an ARM to a fixed-rate loan? Your goals will determine if—and when—refinancing makes sense.

When Might It Be Too Early to Refinance?

Even if you’re eligible, refinancing too soon after closing might not be worth it. Here’s why:

• You may face prepayment penalties (rare, but worth checking).

• You may not have enough equity built to qualify for better terms.

• You could end up extending your loan term and paying more in interest over time.

The Bottom Line

At Mortgage Pipeline, we help you determine the right time to refinance based on your loan type, financial goals, and current market conditions. Whether it’s six months or six years into your mortgage, we’ll guide you through the numbers to see if refinancing makes sense for you.

Want to know if it’s the right time to refinance? Mortgage Pipeline is here to help.