Just a couple of months ago, you purchased your new home and got approval for your mortgage. Now, the national interest rate has decreased and you want to refinance your mortgage loan.
How soon can you refinance your mortgage loan, and is it recommended to refinance your loan shortly after you got your approved home loan? Here are a couple of things that you need to think about.
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The general rule for refinancing your mortgage
Most experts in refinancing say that you should wait at least 24 months after a home loan before you can apply for a refinance loan. But for most people, this is too short after you have applied for a mortgage loan to apply for a refinance loan.
The longer you wait, the better deal you are going to get. However, if the interest rates decrease or you are financially better off, then you can consider applying for a refinance loan, just after 24 months. However, you need to know that not every lender is willing to give a refinance loan after this short period.
It depends on the lender that you have used
You can’t actually say that within two or three years you can apply for a refinance loan. It actually depends on the lender that you have used in the first place and what stands in your contract.
Each lender has different rules and regulations about the waiting period before you can apply for a refinance loan. And, you need to talk to your lender before you can decide which one to use. There are even some lenders where you are going to pay a penalty when you are refinancing your home loan too soon.
Speak to a mortgage broker if you are still unsure
The best thing that you can do, before you decide to refinance your home loan after a short period is to speak to a mortgage broker first. Ask them for advice and if this is now the right time for a refinance loan. They know all the lenders and the market. They will know if this is a good time to apply for a refinance loan or not.
How long should you wait after your mortgage, before you can apply for a refinance loan? Most experts are saying not before the first 24 months are over. But for some lenders this might not be enough time, so speak to your lender and read through your mortgage contract. Make sure that you don’t apply for a refinance loan too soon. This can influence your credit score negatively and make it harder to get a refinance loan in the future.
Learn more about home loans Singapore.