How Fast Can You Refinance a House with a Conventional Mortgage?

Purchasing a home is one of life’s biggest financial accomplishments. You invest months in hunting for your dream home, preparing paperwork, and eventually signing a huge pile of paperwork at closing. But the mortgage industry is dynamic. Your interest rates may vary, your credit rating may improve, or perhaps your house appreciates in value shortly after you purchase it. Then, you realize your terms of settlement a few months back are not as compelling as those offered today.

One of the things we hear often is homeowners asking…how fast can you refinance a house? When it comes to refinancing, you basically replace your current mortgage with a new one that has more beneficial terms. Although it is quite easy to understand, it can get a bit confusing regarding the timeline of making a move that will work best for you financially.

Why Homeowners Refinance Their Homes

There are quite a few good reasons to look into refinancing your home loan. The most typical reason we see is to get a lower interest rate. Even a small drop in your interest rate can save you money each month and in the long run. Also, paying off your loan faster puts money in your pocket to spend or save elsewhere.

Removing private mortgage insurance (PMI) is also one of the key reasons. You most likely pay PMI if you put a small down payment when you bought your home. But as your home acquires sufficient equity, you can refinance your home to get rid of PMI. We also assist our clients at BrickWood Mortgage in changing from an adjustable-rate mortgage to a fixed-rate mortgage. Moreover, some of our clients opt to refinance in order to pay off their home earlier, which allows them to acquire more equity.

Are You Eligible to Refinance Yet?

When can you refinance a mortgage? The key is to understand the nature of the loan one currently has and the nature of the refinancing one wishes to undertake. If one wishes to undertake a refinancing that is a “rate and term” refinance and does not require the withdrawal of cash, you may be able to refinance immediately. From a technical standpoint, conventional loans do not require a waiting period. For some mortgages, there is a “seasoning” requirement.

Many lenders will demand a waiting period, which will last six months. This is a way of saying the lender wants to see six months of on-time payments on the mortgage you currently have before they will lend you the funds for the new mortgage. This waiting period is a way of proving you’re a good borrower.

If you’re planning on doing a cash-out refinance to get the home’s equity to finance home renovations or to pay off debt, the waiting period is mandatory, and it will last six months from the closing of the original mortgage. We can help you examine the closing of the mortgage to determine the exact waiting period.

The Importance of Working with a Mortgage Broker

Dealing with all these timelines and the rules of the lenders can be very frustrating if you are trying to do it all by yourself. The retail lenders have very rigid rules. This means that they can have stricter wait times than what may actually be required. This is where we can come in. As mortgage brokers, we have a broad network of wholesale lenders.

We are aware of the subtleties of the market. For instance, if one lender insists that we wait twelve months for a refinancing, but another only waits six months, we can consider your options. It is our job to research the rates and terms so that you do not have to. It is our intention to place your application in the very best position for a smooth refinancing.

If you currently have an FHA loan in SC, you might qualify for special refinancing programs. Many homeowners explore options like FHA loan refinancing to secure lower rates or change their loan terms.

Timing Your Financial Move

Refinancing: this is an excellent way to maximize your personal finances, but timing makes all the difference. Refinancing too early could result in your credit being denied, and waiting for too long could result in missing out on an opportunity when interest rates go down. With this understanding, you will be able to make a move that will lead you to success. Let’s take a look at your existing mortgage at BrickWood Mortgage and see if this is the best time for you to refinance for a healthier financial future!