How Soon Can You Refinance a Mortgage? Here Are the Rules

Some mortgages let you refinance immediately after getting the original loan. Others require a "seasoning" period to elapse.

Holden LewisSep 14, 2020
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How soon you can refinance a mortgage depends on the type of home loan you have and the type of refinance mortgage you're getting.

Some mortgages let you refinance immediately after getting the original loan, if you want. Others require a period to elapse — what the mortgage business calls "seasoning."

This article outlines the seasoning rules for various types of mortgages: conventional, FHA, VA, USDA and jumbo loans.

» MORE: How and why to refinance your mortgage

Rules for refinancing conventional loans

You probably have a conventional mortgage if your loan isn't backed by the Federal Housing Administration, U.S. Department of Veterans Affairs or U.S. Department of Agriculture, and if it's not a jumbo loan. A conventional mortgage meets qualification standards set by Fannie Mae and Freddie Mac.

In most cases, you may refinance a conventional loan as soon as you want. You might have to wait six months before you can refinance with the same lender. But that doesn't stop you from refinancing with a different lender.

An exception is cash-out refinances. To get a cash-out refinance on a conventional mortgage you must have owned the home for at least six months, unless you inherited the property or were awarded it in a divorce, separation or dissolution of a domestic partnership.

Rules for refinancing FHA loans

An FHA loan is a mortgage insured by the Federal Housing Administration. The FHA has several types of refinances, each with its own rules.

If you want to get an FHA refinance to borrow more than you owe and take the difference in cash, you're looking at an FHA cash-out refinance.

If you don't want to take cash out, and you're willing to get (and pay for) an appraisal, you may choose an FHA rate and term refinance or FHA simple refinance.

If you have an FHA loan and want to refinance into another FHA loan without getting an appraisal, an FHA streamline refinance may be what you're looking for.

  • Cash-out. You have to own and occupy the home as your principal residence for at least 12 months before applying for a cash-out refinance. You can do a cash-out refinance of a home you own free and clear. If you have a mortgage, you must have had it for at least six months. Any mortgage payments due in the last 12 months must have been made on time.

  • Rate and term and simple refinance. You’re required to wait at least seven months before refinancing — long enough to make six monthly payments. Any mortgage payments due in the last six months must have been paid on time, and you can have a maximum of one late payment (30 or more days late) in the six months before that.

  • FHA streamline. An FHA streamline refinance is a faster way to refinance from one FHA loan to another, with less paperwork, because it doesn't require an appraisal. You must have had the mortgage at least 210 days and have made at least six monthly payments. Your last six months' payments must have been on time, and you can have a maximum of one late payment (30 or more days late) in the six months before that.

Rules for refinancing VA loans

To refinance into a VA loan — a mortgage backed by the Department of Veterans Affairs — you’re required to wait at least 210 days or long enough to have made six payments, whichever is longer. This requirement applies whether you're getting a VA cash-out refinance or a VA Interest Rate Reduction Refinance Loan, known as an IRRRL.

Rules for refinancing USDA loans

The U.S. Department of Agriculture offers two mortgage programs for rural home buyers: guaranteed loans and direct loans. To refinance a guaranteed loan, you must have had the mortgage for at least 12 months. For direct loans, there is no waiting period for refinancing.

The USDA offers three options for refinancing into another USDA loan. If you get a streamlined refinance or non-streamlined refinance, you must have made on-time payments in the last 180 days. For the streamlined assist program, you must have been current on your mortgage payments in the last 12 months.

Rules for refinancing jumbo loans

As with conventional loans, in most cases you may refinance a jumbo mortgage whenever you want. Jumbo loans are for amounts exceeding the loan limits used by Fannie Mae and Freddie Mac, and lenders tend to have stricter underwriting requirements than for conventional loans.

Reasons to refinance

Now that you know how soon you can refinance, make sure you do it for a constructive reason. Many people refinance to get a lower interest rate on the mortgage, along with lower monthly payments. But that's not the only way to benefit from refinancing. You might want to refinance to:

  • Shorten the loan's payment period — for example, from 30 years to 15 years. Even if you decrease your interest rate, the new loan's monthly payments might be higher, but you can save thousands of dollars by paying interest for a shorter period.

  • Switch from an adjustable-rate mortgage to a fixed-rate loan (or vice versa).

  • Settle a divorce, separation or dissolution of a domestic partnership.

  • Borrow from the home's equity to pay for home renovations or other expenses.

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