how soon can you refinance a mortgage

How Soon Can You Refinance a Mortgage?

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February 13, 2020

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As a property owner, there are so many things to keep in mind. For starters, finding a home that you like and that fits your needs is a crucial step. Once you have your home, make an offer, and sign the papers, then you are ready to move in! Of course, you get to escape the world of paying rent to a landlord. On the other hand, you are responsible for a mortgage. Depending on your financial situation, the state of the economy, or fed rate changes, you might find yourself wondering how soon you can refinance a mortgage. Unfortunately, some homeowners put off refinancing their homes because they don’t quite understand the process, even though it may save them money.

Let’s go over the reasons for refinancing your mortgage and review when and why you might want to go through the process. We’ll talk about drawbacks and why refinancing your Florida home mortgage in 2020 might be the best decision you make all year. 

What is a Mortgage Refinance?

When you get a mortgage on your home, you essentially have a bank buy your house, and then make payments towards the full ownership of the house. It’s almost always cheaper than renting and provides you with the deed and ownership of property in the state of Florida. 

When you refinance a mortgage, you’re essentially doing a similar thing. Like the original mortgage, homeowners shop around to see what rates they can get, and what terms are available to you.

When you refinance your mortgage, you’re likely getting yourself in a situation that’s superior to your current loan terms. There are a handful of ways in which a refinance can help you. Whether its cash on hand or a better interest rate, here are some ways you can expect to be helped by a home mortgage refinance.

When is it Helpful to Refinance a Mortgage?

When you refinance a mortgage, you can find yourself helping out your finances in a few different ways. 

For example, refinancing can get you a better interest rate. If your credit score has improved since you first took out your mortgage, then now might be a good time to refinance to pay less interest over time. Plus, you can use a refinance as a way to change the length of your mortgage. If you lengthen your mortgage from a 15 year to a 30 year, you can decrease your monthly payments. If you shorten from a 30 year to a 15 year, yes your payments go up, but you pay less interest over time. 

Refinancing might also be helpful if you want to cash out significant equity. If there’s value in your home and you cash out, you’ll get money for bills, a big purchase, remodeling, or other expensive activities. 

Lastly, if you have an adjustable-rate mortgage, you can possibly refinance into a fixed-rate to avoid any concerns with the housing market. At a fixed-rate, your interest rate stays the same and you can keep your financial focus on other areas of investment.

How Soon Can You Refinance?

So you’ve signed the papers and have moved in. You’re paying your mortgage and then the feds cut the interest rate. Your mortgage stays the same, but you see that there are now mortgages available with better rates. Can you refinance to take advantage?

It may not be long after you sign papers on your mortgage that you find a better offer is out there. While this is frustrating, you can always refinance right? Well, that depends on your mortgage terms. For the most part, most lenders do not allow you to refinance within 120-180 days of signing.

If you have an FHA loan, you have to wait even longer, a whole 210 days, before switching to a conventional loan. Depending on your loan terms, there may be stipulations when refinancing with the same lender. Check the terms of your mortgage to see if any of these apply to you.

In most cases, refinancing your mortgage is a great option to help get you in a better financial situation than you are right now. There are a few negatives to keep in mind, but none should keep you from considering a refinance altogether. Still, they’re worth reviewing to make an informed decision.

Are There Any Negatives to Refinancing a Mortgage?

When you refinance a mortgage, we’ve already discussed how it’s largely the same as getting the first home loan. Unfortunately, that does mean you will have to go through the process again of paying closing costs. These include origination fees, title insurance, application fees, and closing fees. 

As mentioned, elongating your mortgage loan duration can also mean you’ll be making payments longer than originally planned. While this does lower your costs per month, it also might mean you pay more interest as the years go on.

In most cases, refinancing still yields you a better result. The best way to determine whether it’s a good option for you is to discuss your situation with a financial professional.

Refinancing May Be the Best Decision You Make This Year

If you’re ready to refinance your mortgage, then the team at the Associates Home Loan of Florida are here to help. Whether you want to score a lower interest rate or get lower monthly payments, we can help you find the right loans for your situation. The best thing you can do as a homeowner questioning whether or not refinancing is right for you is to turn to the experts. 

For Florida homeowners, there is nobody more qualified or excited to help you get your home mortgage situated just right for you then Associates Home Loan. Mortgage refinancing experts and industry professionals are waiting to help you over the phone or online. Ready to find out more? Visit our website, or call (813) 328-3632.

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