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How soon can you refinance after refinancing on a conventional loan?

Someone asked me this the other day and I did not know. They are locked with a lender and happy, but when they heard that rates might go even lower with the Fed's announcement now they are thinking that they may want to refi again if rates drop later.

Is there a lender waiting period that you must have before you refinance? I would think that you would need to wait for maybe 6 months or something, but I don't know. I appreciate it and all answers are guaranteed a thumb :)
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November 04 2010 - US
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Sunnyview, As a mortgage banker my company (and most) have a six month "seasoning" guideline.  As a mortgage broker, I would not have any such limitation unless I tried to go to the previous lender with the new refinance....however, the first lender is very likely to send me a "bill" for any overages I received if their loan pays off in less than 90 days.  The "churning" of loans is very problematic for lenders/investors because they are paying for assets that will not remain on their books long enough to reap profit.

Further clarification:  If the consumer has no prepayment clause on their existing loan, there is no "waiting period".  Previous comments apply strictly to the mortgage professional...a consumer can do whatever they want....they would just need to work with a different loan officer.
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November 05 2010
hi sunnyview,  just check to see if you have a penalty with your current lender (very rare that you would) and if you do, find out what date you would need to close after in order not to incur that...i refinancing a client right now that needed to close exactly 6 months after his current loan closed (it was a refinance also)  so we just timed everything to fit that....good that you are watching things because i've had several clients refinance twice this year.....andy holloman [Link deleted by moderator]
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November 05 2010
90 days to 6 months but a few lenders will have a streamline program that will let you refi after one month.  
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November 04 2010
.
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November 04 2010

 

There should be no minimum period unless you signed a prepayment penalty.  Don't forget the banks make money every time they issue a loan.  They'll be happy to refi for you every week if they could.

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November 04 2010
An FHA streamline refinance requires 6 months of payments but otherwise Agency loans do not have a timetable. As has been mentioned, all loans have recapture penalties that vary from 90 days min. to 6 months. We may experience that issue in the near future, and hopefully customer and loan officer will stay in touch so loan officer can be involved if a refinance is prudent. Likely to be best option for consumer as loan officer would make every effort to lessen impact of recapture fees by giving best rate, fees, etc possible to capture new loan.
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November 04 2010
Immediately.  If you can find a better rate jump on it now.
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November 04 2010
Realistically if there is no prepayment penalty they can refinance at any time, but there will be potential charge backs to the broker that handled the transaction.
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November 04 2010
There is no waiting period for the borrower, but we the originator have the exposure of an early payoff where we would need to pay back any and all YSP, and some lenders still will hit the originator with 1% of the loan amount even if there was no YSP.  It is something the originator needs to watch out when rates are dropping.  The time period depends on the agreement the lender has with the investor.  Any "pay back" cannot be charged to the borrower. 
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November 04 2010

Instead of waiting to refi again, there is another avenue.  Some lenders provide a float-down option where you have the option to get a lower interest rate if it goes down (from where you locked it at).  However, there is a cost for this option and one just needs to determine if the difference in monthly payments is worth the cost for the float-down.  Also, each lender will have their own terms of when you can exercise the option (i.e., only if the interest rate is more than x% lower).

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November 04 2010
It really depends on the lender, some lenders want to see at least a 6 month seasoning on the current mortgage.
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November 04 2010

Typically there arent any restrictions other than showing the borrower made their first months payment. Some lenders will run into a recapture issue where they have to pay back all or some of the back end proceeds.

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November 04 2010
 
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