How often can you refinance your mortgage?

There is no limit to your practical ability to refinance, but there are some important factors to consider before touching on your mortgage. (iStock)

Although the coronavirus pandemic has been a devastating economic blow to millions of U.S. households, there is at least one silver lining: mortgage rates have fallen since March, which now makes good time for some homeowners to refinance.

If you have already refinanced your home in recent years, you may be in doubt as to whether or not to consider another. Don’t worry, you can refinance your home more than once – the question is whether it makes sense for you to do so right now.

Here’s everything you need to know when considering another mortgage refinance.

What are today’s mortgage rates?

Before considering a new refinance, you will want to look at the latest interest rates.

Mortgage rates recently fell below 3% for the first time ever. On August 27, the average interest rate on a 30-year fixed mortgage fell to 2.91% from 2.99% the week before, according to Freddie Mac. The rate for a 15-year fixed mortgage also fell from 2.54% to 2.46% in the same period.

You can explore your mortgage refinancing options by visit Credible today to compare prices and lenders.

IS IT worth refinancing for 1 percent?

How many times can you refinance your mortgage?

If you have refinanced your home in the past, you may be wondering how many times you are able to afford it refinance a mortgage.

The simple answer is that there is no limit to how often you can take out a mortgage – unless you apply for a streamlined financing on a Federal Housing Administration (FHA) or Veteran Affairs (VA) loan, in which case at least 210 days has expired from your end date and at least six months since the first payment had to be paid in order for you to qualify for a new FHA or VA loan.

Comparing prices and fees from different lenders saves you money. You can put your information directly into Credible’s free online tool to find your loan amount.


There are still some important ones factors you need to consider before refinancing your home borrow a second or third (or fourth) time.

Do you need to refinance your mortgage multiple times?

If your mortgage rate is more than one percentage point above current rates, it usually makes sense to refinance, experts say. But whether you can benefit from refinancing really boils down to when you plan to sell your home and how long it takes for you to recover your closing costs.

Closing costs for refinancing usually run between 3 percent and 6 percent of your new loan amount. So let’s say you have a $ 300,000, 30-year fixed-rate mortgage at 4.4 percent interest, and you pay off a $ 1,688 mortgage. If you refinance to a 30-year loan with a 3.0 percent interest rate and closing costs of 3 percent, you will reduce your mortgage payment to $ 1,303, which will save you $ 385 per month. Month – so you can go straight and start saving after a little more than three years.

Another thing to consider: every time you refinance, you reset the clock on your home loan. For example, if you have 20 years left on a 30-year mortgage and you plan to refinance for another 30-year loan, it will take you another 30 years to pay your homeprovided you do not prepay your mortgage or pay on a weekly schedule.

On that note, some home loans have a down payment penalty – ie. a fine that the lender of your mortgage charges you if you pay off the loan before its expiration date – that can be triggered if you refinance your mortgage. Therefore, if your loan has a prepayment penalty, you should recognize it when considering whether to refinance your mortgage.

In these times of financial uncertainty, it is also important to take a sober look at your job security before refinancing your mortgage. Read: If your industry is experiencing major layoffs in the light of COVID-19, or if your employer is struggling financially, you may not be in a stable position to cover the final costs of refinancing.

You must too Consider your credit score. In general, the best refi rates apply only to borrowers with a credit score of 750 or higher.


Shop for the best refi prices

Comparing refi loan offers from multiple lenders can save you hundreds or even thousands of dollars over the course of your new loan. Borrowers save an average of $ 3,000 over their mortgage loan by getting five offers, Freddie Mac research found, yet more than three out of four borrowers (77 percent) only apply to a lender when they get a mortgage, according to a study conducted by the Consumer Financial Protection Bureau (CFPB).

Need a little help looking for the best mortgage rates and loan terms? Use Credible’s free online tools to compare mortgage lenders and get pre-qualified rates from lenders in as little as three minutes.


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