Are you thinking about refinancing your home? It’s probably not a bad idea, considering that current mortgage interest rates are hovering right around 4 percent.
Before you do, however, you might wonder if doing so now will limit your options later. After all, mortgage interest rates have ranged from a high of 18.63% in 1981 to an all-time low of 3.31% back in 2012. Since as little as an 0.25% change in rates can have a significant impact on your monthly mortgage payments, you’ll want to lock in the lowest rate possible.
This begs the question: “How often can you refinance your home?”
What happens if you lock in a rate now, and they go down significantly in the future? Or what if you refinance today and then need to access your home equity again a few years from now? Are there rules that will prevent you from refinancing again?
Keep reading, we’re about to tell you everything you need to know!
The Rules About Home Refinancing
When it comes to how often you can refinance your home, it might surprise you to learn that there are no rules or laws regulating this. In theory, you could refinance every month if you wanted to.
So, the question really isn’t whether you can refinance again but whether you should. Let’s take a look at some of the pros of refinancing, so you can decide for yourself.
Pros of Refinancing Your Home
There are plenty of good reasons to consider refinancing your home. Some of the positives include:
- Lower interest rates can lower your monthly payments
- Refinancing to a shorter loan term can help you pay your home off faster
- Refinancing allows you to pull money from your home that you can use for consolidating debt, paying off bills etc.
If you have a great reason to refinance, now is a good time to do it. Just make sure you’re working with qualified mortgage brokers who can help you find the best deal.
Cons of Refinancing Your Home
Unless your rate is very high or you need the money, it might not make sense to refinance. Here are some potential drawbacks of refinancing too frequently.
- Refinancing can be time-consuming
- You’ll have to pay closing costs and fees
- Prepayment penalties may apply
If you’re not sure you’re going to stay in your home for a long time, the costs and effort of refinancing might not be worth it. Before you make a decision, consider all of your goals and your financial situation. This includes the monthly payment you can afford, how long you’re willing to hold debt, current interest rates, and your expectations for the future.
How Often Can You Refinance Your Home? It Depends!
Not that you know there’s no hard-and-fast answer to the question “How often can you refinance your home,” you’re ready to weigh the pros and cons and make your own decision. The best option for you will really depend on your personal situation.
Are you considering refinancing so you have extra money to upgrade your house? Check out the Home Improvement section of our blog for some inspiration!