There is absolutely no limit to how many times you can refinance your home. Lenders do sometimes enforce a certain waiting period of time between closing a mortgage and refinancing for a new one. If you’re looking to refinance your home multiple times then you are in luck, it’s possible to do.
How often you refinance your home depends on a number of factors and questions. Three questions I see often are the following, which I’ll try to answer for you today:
- Is it easier to refinance with your current lender?
- Is it bad to refinance your house multiple times?
- Does refinancing your home affect your credit?
Answering these questions won’t only give you peace of mind when you try to refinance your home but it’ll also give you more knowledge and help you prepare your home for refinancing.
Is it easier to refinance with your current lender?
While some people argue that it’s easier to refinance with your current lender, there are both pros and cons to doing it. The main benefits that you can expect if you decide to refinance with your current lender are:
- A positive relationship with that lender;
- The possibility of lower fees if you have always made your payments on time;
- A lower interest rate, once again if you have always made your payments on time;
- Faster turnaround time on refinancing–sometimes refinancing a home can take a long time.
Additionally, if you’re refinancing your home with the same lender and worried about closing costs, you might find yourself in a better situation. Sometimes, the same lender will help to alleviate the costs of closing costs by:
- Lowering title insurance fees
- Remove or lower private mortgage insurance fees
Remember, this doesn’t happen all the time but it has happened before in the past and it never hurts to ask.
If none of those advantages are applicable to your situation then it might be better to look around at other options to see what you can find for lenders. Other lenders will want your business, especially if you have a good credit score and haven’t missed any mortgage payments.
In general, it’s always wise to shop around for a better deal. You don’t have to commit to anything but just looking around to see what other banks or lenders are offering can help you ensure that you have the best deal on your hands.
Is it bad to refinance your house multiple times?
Depending on how you examine the topic, it depends on your specific situation whether or not it’s bad to refinance your house multiple times. It will not hurt your credit as long as you’re able to make your payments on time.
However, there are some bad financial reasons to refinance a home multiple times. These bad financial reasons to refinance a home multiple times include to move into a longer-term mortgage, consolidate debt, or no-cost refinancing.
It is up to you to figure out whether or not it’s bad to refinance your house multiple times. If you can make it work within your own budget and financial situation then you should make the call. Financially, you need to do your research on whether or not refinancing your home multiple times is the right move for you
Just remember, besides your own financial situation, it is not considered ‘bad’ to refinance your house as many times as you want.
Does refinancing your home affect your credit?
There is the possibility of affecting your credit score by refinancing your home.
The first way this can happen is by the credit check the lender will do when you start the refinancing process. It’s called a hard inquiry and can temporarily cause your credit score to drop in the short term. This won’t just happen when a lender checks your credit score, any hard inquiry will temporarily drop your credit score.
Another way refinancing your home could hurt your credit is if you apply to several different lenders to figure out which might be able to give you the lowest interest rate. Once again, all of these lenders will do a hard inquiry on your credit and all will temporarily lower your credit score at the same time. One way to avoid this is by applying to every lender you’re considering within a very short period so your credit takes a quick and sudden dip and then recovers. If you apply to different lenders over the span of several months then there is the possibility of seeing a lasting effect on your credit score that could take years to bounce back from.
The last way you should be aware of refinancing your home hurting your credit is when you’re closing the loan that you are refinancing. Technically, your old loan is a long standing credit account and since you’ll be closing it, your credit score will receive a small hit. However, if you’re in good standing on your loan then it won’t be a significant drop on your credit score. Also, as you pay down your new loan, your credit score will begin to rise again.
There is no limit on the number of times you can refinance your home
The bottom line is that you don’t have to worry about how many times you can refinance your home. As long as you’re in good standing with your lender, you can refinance as many times as you want without consequences. It’s not considered “bad” to refinance your home multiple times and many people do it for a variety of reasons.
Refinancing your home with your current lender comes with some advantages that you’ll want to discuss and research while you’re in the refinancing process. Some of these advantages could include lower interest rates, faster turnaround time, and an overall more positive experience with the refinancing process because you already have an established relationship.
However, there are caveats when it comes to refinancing. One of them being that your credit score might take a small hit during the application for a new loan and the closing of your old one. On top of that, your lender might make you wait at least 6 months before they approve you to refinance your home.
Do your research when refinancing your home and make sure it’s in your best benefit every time you refinance.
