How Many Times Can You Refinance Your Home?

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There is no legal limit on how many times you can refinance your home. However, most mortgage lenders have requirements for financing that you must meet every time you apply for refinancing.
If you’re having a hard time making monthly mortgage payments, refinancing the loan may be an option for you. You can refinance your mortgage to remove private mortgage insurance, take cash out of your equity, help lower your interest rate, and more effectively manage your money.
Refinancing a mortgage can seem like a difficult process—that’s why car insurance broker and comparison app Jerry compiled a guide on how many times you can refinance your home and help you determine when you should do it.
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How many times can I refinance my home?

There are no legal limits on how many times you can refinance your home mortgage. You are able to refinance your home as many times as you need, if it makes good financial sense to do so.
However, most mortgage lenders have requirements for refinancing that need to be met every time you apply. If you want a cash-out refinance, there may be additional considerations since you need to build up equity in order to take out cash against it. 
There may also be a waiting period: you’ll typically have to wait six to twelve months between getting the mortgage and refinancing.
Key Takeaway You can legally refinance your home as many times as you need to, but be mindful of your lender’s requirements and any waiting periods before you apply.

Should I refinance my home more than once?

There are benefits and drawbacks to refinancing your home more than once. Whether you’re wanting to balance your monthly budget, pay a significant life expense, or take advantage of an investment opportunity, here are a few things to keep in mind before you decide to refinance your home again.

Lower interest rate

When you took out your mortgage, did you have a low credit score or face high interest rates? If so, refinancing your mortgage could save you quite a bit of money. 
You can usually save money by lowering your interest rate without updating your loan term. Lowering your interest rate could save you hundreds or even thousands of dollars!

Changing loan term

Your income could change at any moment, and you can refinance your mortgage to match your financial situation. If your income has increased, you can refinance your mortgage to a shorter loan term to pay it off sooner. 
If your income has decreased, you have the option of lowering your monthly mortgage payment by refinancing to a longer loan term. Just keep in mind that longer loan terms mean paying more in interest. 

Getting rid of mortgage insurance

If you bought your house with a down payment of less than 20%, chances are you’re making payments on private mortgage insurance (PMI) as a condition of your loan. PMI protects your mortgage lender in the event you default on your loan. 
Once you pass the 20% equity threshold on your loan, you should be able to cancel your PMI.
The same principle applies if you have a Federal Housing Administration (FHA) loan. When you reach 20% equity on your FHA loan, you can refinance to a conventional loan and stop paying for insurance for your lender.

Closing costs

Each time you refinance your home, you will have to repay closing costs. Here are some common closing costs you can expect to pay when you refinance your home: 
  • Application fees: When you request a refinance, your lender may charge you a fee for your application that you will need to pay even if you don’t end up receiving the refinance.
  • Appraisal fees: Your lender may require another appraisal for the refinance to make sure they aren’t giving out too much money.
  • Attorney review fees and closing fees: An attorney needs to finalize and review the loan before closing, and fees will vary by state.
  • Inspection fees: Before refinancing, you’ll need to get an inspection. Requirements vary by state.
  • Title search and insurance: You’ll pay title insurance and search fees when you work with a new lender so they know you’re the only one with rights to your property.
You can usually estimate paying around 2-3% of your total loan amount, which can cut into your savings quickly.

Lender’s standards

In order to refinance, you will have to meet your lender’s standards. You’ll need to know about your credit score, debt-to-income (DTI) ratio, and your current equity before you can get financed. 
Note that it may be difficult to get approved for the refinance or find a lower interest rate if you have a lower credit score, more debt, or less income than when you got your mortgage initially. 

Penalties

If you pay off your mortgage before the loan term ends, some lenders have clauses in their contracts that penalize you. For example, you might need to pay anything saved in interest if you were able to pay off your mortgage within five years of the loan term.
These penalties can cause issues if you’ve already refinanced your home once before and the loan term was reset. Make sure to read through the terms of your previous refinance and check for an early repayment penalty before submitting your next application.

How to save on home insurance

Refinancing your mortgage can help you manage your monthly budget, and Jerry can help you save on your home insurance. 
Saving on your homeowners policy has never been easier thanks to Jerry: just download the app, answer a few questions, and you’ll get competitive quotes from trusted providers in less than a minute!
Jerry does all the work for you—gathering quotes, filling out paperwork, and even helping you cancel your existing policy. Jerry specializes in finding low prices for users, and you can save even more by bundling your new homeowners insurance with an auto policy. 
“This was so easy! Signing up with Jerry saved me $499 on my semi-annual insurance. As if it was nothing!” —Kache P.

FAQs

Refinancing a mortgage is done by taking out a new loan to pay off your current loan. You’ll need to file an application, go through the process of underwriting, and go to closing like you did when you originally bought your house.
There isn’t a legal limit on the number of times you can refinance your home. However, you may have a waiting period of six to twelve months for refinancing.

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