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How Soon After Buying A House Can You Refinance

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The rules to refinance after buying a home with cash may be a bit different and the lender may not give you the same amount you otherwise would have gotten through a loan at the time of the purchase, but you can still finance the transaction.

Rules are subject to change and there will be other restrictions you must abide by to conform to Fannie Mae requirements. Your mortgage lender or broker can give you more information on how soon you can refinance after buying a home with cash.

In principle, there is no minimum amount of time that you must wait before refinancing your conventional mortgage. In theory, you could refinance immediately after purchasing your home. However, some lenders have rules that stop borrowers from immediately refinancing under the same lender.

Lenders apply these guidelines because they do not want you to buy a property that you indicated would be your primary residence even though you always intended to move out of the home and use it as a rental property soon after your mortgage closed.

To summarize, you are usually required to wait six months (for a refinance) or twelve months (for a home purchase unless you sell your current primary residence) before you can qualify for a new mortgage after buying a home or refinancing your current mortgage. If you are willing to meet the required waiting period or if you purchase a property located in a different county, you should be able to qualify for a new owner-occupied loan and benefit from better mortgage terms.

Whether or not you plan to move in the next few years can have a big impact on your decision to refinance a mortgage. If your current one is your forever home, then all the savings you make after your break-even point are yours to bank.

What does this mean for avid travelers who sign up for travel rewards credit cards with regular frequency Typically, buying or refinancing a house means needing to temporarily put the brakes on signing up for the latest and greatest cards.

The guidance changes slightly for a refinance on a primary residence because the closing date is not the funding date. With refinances, the borrower has a three-day right of rescission, which means you have three business days after closing to rescind or cancel your mortgage loan. Your refinance is not funded until these three days have passed.

Selling your house after a mortgage refinance is possible, but there are some rules you should know about. Find out what clauses in your mortgage contract to look out for and whether selling after refinancing is a smart financial move.

You may also be subject to a prepayment penalty. While a prepayment penalty clause in your mortgage contract does not make it illegal to sell your house after refinancing, it could cost you a lot of money.

A legal obstacle that could prevent you from selling your house just after refinancing or from renting out to tenants is called an owner-occupancy requirement. This requirement can state that the person who signs for the loan has to either liveon the property or own the property for a set amount of time after the refinancing.

Some owners who have negative equity may be able to refinance their mortgage at a lower interest rate or a fixed interest rate to save money. The negative equity is folded into the new mortgage. Using our above example, even though the house is onlyworth $290,000 the lender may agree to refinance the $300,000 amount owed. This can give a homeowner different terms or a lower interest rate for the life of the loan.

Alternatively, you may find that your local real estate market is experiencing rising house prices and you want to take advantage of getting the most for your house that you can. Whatever your reasons for wanting to sell after a refinance, the best thing you can do for yourself is to get in touch with a top agent in your local market who can give you an accurate picture of what to expect from the market and whether it is a financially smart move to sell after refinancing.


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