Many homebuyers go into their purchase thinking they can refinance into a lower rate in the future. Although this may be true, it’s not something that one should consider as a factor when deciding to buy a home. Who knows what rates will be or what qualifying guideline may prevent a refinance from being a viable option.
Just recently, most lenders across the country adopted a new policy on the refinancing of certain loans that are sold into Ginnie Mae pools. These loans include FHA Cash-Out refinances, FHA streamline refinances, USDA streamline assist refinances, VA IRRRL (Interest rate reduction refinance loans) and VA cash out loans. Under these new rules, the borrower must make at least six consecutive monthly payments before being eligible to refinance using one of these loan types. Furthermore it is specified that the first payment due on the refinance can not be less than 210 days from the date the first payment was due on the original loan.
At this time only the loans mentioned here are affected by these new rules. If you have an FHA loan and want to refinance to a conventional loan, and the purpose is only to reduce your rate/payment or term (go from 30 years to 20 years for example) then there is no minimum waiting period. But if you want to do a cash out refinance then there is a six month waiting period (from the date of the original loan closing to the date of the new loan closing). Lenders often sell mortgage loans after originating them and if a loan pays off quickly, the lender may have an early payment penalty. For this reason many lenders encourage homebuyers to make six payments before refinancing even if they qualify to refinance sooner.
As mortgage lending guidelines are very specific and sometimes complex, always check with a trusted mortgage advisor when considering a refinance.