I just took out my first mortgage on a home. How long do I have to wait before I can refi for a lower rate?

Now is not a good time. Your house will probably appraise for less than it’s worth. If you have noticed the housing market is doing poorly.

the rate has to drop enough to make it worthwhile because refinancing costs money – if it only drops your payment $ 50/month and refinancing costs $ 2000, it will take you 40 months to get back where you were, plus you’re not going to have any equity in the house for at least a few years for the bank to allow you to refinance

A year is typically a good time frame.

However, as other posters pointed out, it does cost money to do this.

However (again), rates dropped by a big number this month, 3/4 of a point, so the mortgage you have now is probably pretty dang good.

You can always call whatever bank you’d like and ask them what rates they could offer you and what your monthly payments would be. This can be an invaluable tool in seeing if it’s a good deal for you.

And please stay away from ARM loans, they can really mess you up.

You can refinance now. There is no set time you have to wait unless you have a pre-payment penalty on your existing loan. Refinancing your home has to make sense by either putting you in a better financial position or serve a special purpose.

Common reasons to refinance:

- Lowering your interest rate or term of your loan (from a 30 year fixed to say a 20 year fixed)

- Debt Consolidation Refinance where you pay off non-mortgage debt by using the equity in your home (credit cards, auto loans, students loans, etc.)

- Using the equity in your home to pay for a major expense

- Swiching from an adjustable rate mortgage to a fixed rate mortgage

If you got your loan through a mortgage broker, they would really appreciate you not refinancing for about 4 months.

You don’t have to wait. Talk to your loan officer and see if what you qualify for will put you in a better loan than what you currently have.