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Waiting Period on Refi?

I recently purchased my home (2 months ago) at a much higher rate than what the market is producing now. How long do I need to wait before I refinance? I am a first time home buyer, so I am not sure if that matters. by tlinden265 from Patterson, Louisiana. Nov 28th 2018 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

More info needed.. what type of loan do you have? FHA, VA, USDA, Conventional? For FHA, you have to wait 12 months, and you need to be saving at least 5% off your monthly payment.. but with conventional, you can refinance now.. so long as there is a net tangible benefit.. Also, depending on whether or not you used grant funds, you might need to wait up to 3 years.. Here in AZ, we have several different programs which grant you down payment funds up to 5% of the purchase price, but you are not allowed to refinance inside of the first 3 years, or you would have to pay back the grant. Another thing to consider is closing costs.. you might be able to lower your interest 1% on your loan, but if you have to pay $3500 in closing costs to do it, then it's important you calculate what the pay back period would be to see if it's beneficial to you. This is where the loan amount might come into play.. saving 1% on an $80K loan might not be that beneficial. but if you are saving 1% on a $400K loan, then it could be. When calculating your "Pay Back" period.. take your new loan amount and deduct the payoff of your existing loan.. this will tell you how much your net closing costs are.. Then take that number and divide it by your monthly mortgage payment savings. Example: New loan $203K, Payoff on existing loan $200K.. = $3000 in net closing costs.. Old payment $1400 per month, new payment $1300 per month =$100 monthly savings. $3000 in costs divided by $100 in monthly savings = 30.. this means that after 30 months, you start saving $100 per month.. If you plan on staying in your home for 10 years, then this would be beneficial to refinance.. but if you plan on moving in 3 years, then you might not want to refinance.. Again, more info needed to address your exact scenario, but you should have a better understanding now.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

Nov 28th 2018
Ralph Richard Guertin (
#136 ranked lender in Florida - 800 contributions

Will couldn't of expressed it any more details are needed to determine net benefit to

Nov 29th 2018
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,457 contributions

There may or may not be a waiting period depending on what loan you have today, and depending on what new loan type you would be going into. For example if going FHA to FHA, there is a waiting period. But if you go FHA to conventional, there is no waiting period. I'm a little more concerned about your comment that you closed at a much higher rate than the market is now. Essentially in the past few months, rates have crept up slightly, but have hovered about .25% one way or the other. This leads me to think something else is going on here. For example, many first time home buyer programs come at higher rates than standard programs. Maybe the lender gave you a higher rate in exchange for low or no closing costs. Maybe you only qualified for a higher interest rate program because of poor credit. Maybe you are just looking at fake teaser rates that are all over the internet, and not actually real rates. Regardless, something doesn't pass the smell test. Then, assuming you really can get a much better rate, remember that you need to pay closing costs all over again. This needs to be considered as to cost, monthly savings, and how long will you potentially be in the loan. The bottom line is just call a local mortgage broker, and let them go over your situation so you can get good solid answers. For homes in MN, WI, and SD, visit me at NMLS 274132

Nov 29th 2018
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