Key Takeaways
- You can usually refinance after one year and sometimes even sooner depending on your loan type and lender rules.
- Having enough equity and a solid payment history are key to qualifying for most refinances.
- Even if you're eligible, refinancing only makes sense if savings exceed costs and align with your goals.
Yes, you can refinance after just one year, and in some cases even sooner, depending on your loan and lender requirements.
Many homeowners consider refinancing to replace their current mortgage with one that offers better terms. Refinancing is a common practice, but requirements can vary by loan program and lender.
Loan type rules and refinance waiting periods
The same way mortgage programs aren’t all created equal, not all refinances are the same.
Even though the end goal is similar - lowering your payment, getting a better interest rate, or adjusting your loan terms - the waiting period for refinancing can vary depending on the type of loan and lender requirements.
However, if you wait at least a year after getting your original mortgage, in most cases you’ll be eligible to refinance. If you try to refinance sooner, though, you might have to wait six to seven months depending on the program.
Common refinances and their typical waiting periods
- Conventional refinance: No wait for rate-and-term. For cash-out, most lenders require 6 months and at least 20% equity.
- FHA refinance:
- Streamline: 210 days + 6 on-time payments
- Rate-and-term: 6 months
- Cash-out: 12 months with on-time payments
- VA refinance: Must wait 210 days or 6 on-time payments (whichever is longer), whether it’s a VA streamline (IRRRL) or VA cash-out.
- USDA refinance: Usually 12 months of on-time payments. Some streamline options may allow 6–12 months, depending on the lender.
When refinancing after 1 year makes sense
Just because you’re eligible to refinance after one year doesn’t necessarily mean it’s the right move for you. Many factors go into this decision, and while it might make sense for one homeowner, it might not make sense for you.
One common reasons to refinance is taking advantage of lower mortgage rates. Because rates determine your monthly payment, a substantial drop could lower your payment and free up money for other financial goals, such as saving, investing, or making home improvements.
Equity is another important consideration. You typically need at least 20% equity before you can refinance. For conventional loans, having 20% equity can also remove private mortgage insurance (PMI), which further reduces your monthly payment.
For FHA loans, if you initially put down less than 10 percent, refinancing into a conventional loan can eliminate mortgage insurance and potentially secure a lower rate, giving you extra savings.
Other reasons to refinance include switching from an adjustable-rate mortgage to a fixed-rate mortgage. This change can provide more stable monthly payments and protect you from potential rate increases.
Additionally, if your credit score has improved since closing on your original loan, you may qualify for a better interest rate, which can further lower your payments.
Refinancing can also adjust the term of your mortgage. For example, moving from a 30-year loan to a 15-year loan may only slightly increase your monthly payment, yet pay down your mortgage balance faster and reduce the total interest paid.
Time to make a move? Let us find the right mortgage for youHow to move forward with refinancing after 1 year
If it’s been a year and you feel refinancing is worth it, check your loan type to see how long you have to wait before applying.
Depending on your program, this could be six or seven months. Also consider whether you want to stay with the same loan program or switch to another. For example, if you have an FHA loan, you might refinance into a conventional loan to avoid mortgage insurance.
While you can work with your current lender again, refinancing gives you the flexibility to shop around. You’re creating a new mortgage, so you’re not tied to the same bank.
You can get a quote from your current lender and at least two or three additional lenders. Compare rates, fees, and terms, and also check customer reviews to evaluate their level of service.
Run the numbers, too, since refinancing involves closing costs (typically ranging from 2% to 5% of the loan amount). So if refinancing costs $5,000 and lowers your monthly payment by $250, you should stay in the home long enough (about 20 months) to recoup those costs. Otherwise, the refinance could end up costing more than it saves.
The bottom line
Yes, refinancing after a year is generally possible, but you’ll need to consider your individual circumstances to determine if it makes sense.
Think about how much equity you have, your purpose for refinancing, and how long you plan to live in the home. If it matches your financial goals, get quotes from multiple lenders to see how much you can possibly save and decide whether the cost of refinancing is worth the effort.
For a broader look at timelines across all loan programs, see our guide on How Soon Can You Refinance a Mortgage?
