How long do I have to stay in my house after refinancing?

Asked by: Prof. Grant McClure  |  Last update: February 9, 2022
Score: 4.2/5 (8 votes)

You can sell your house right after refinancing — unless you have an owner-occupancy clause in your new mortgage contract. An owner-occupancy clause can require you to live in your house for 6-12 months before you sell it or rent it out. Sometimes the owner-occupancy clause is open ended with no expiration date.

How many years should you stay in a house after refinancing?

The Dodd-Frank Act confines the time to no more than three years, but you could be prohibited from selling and paying off the loan within that time, at least if you don't want to cough up as much as 2 percent of the amount you borrowed. This drops to 1 percent by law if you make it into the third year before you sell.

Can you sell house shortly after refinancing?

You can sell your home immediately after refinancing if you wanted to, unless there is an owner-occupancy stipulation in your refinancing agreement. If there isn't, you can sell your home right away!

Can I rent out a house I just refinanced?

If you fully intend to rent out the property after your refinance closes, especially within a year of closing, then you should select rental property on your application. ... Additionally, you can usually qualify for an owner occupied refinance with less homeowners equity or a lower down payment.

Can I rent my house without telling my mortgage company?

Can I Rent Out My House Without Telling My Mortgage Lender? Yes, you can. But you'll probably be violating the terms of your loan agreement, which could lead to penalties and immediate repayment of the entire loan. So before you decide to rent out your property, you must inform the lender first.

5 Mistakes I made when refinancing my home mortgage

20 related questions found

Can you rent your primary residence if you have a mortgage on it?

Can You Rent Your House Without Telling Your Mortgage Lender? You can rent your house, even if you initially bought it to be your primary residence, but you'll need to notify your lender. Just going ahead with your rental plans without contacting your mortgage company can have consequences.

Do I lose equity when I refinance?

Do you lose equity when you refinance? Yes, you can lose equity when you refinance if you use part of your loan amount to pay closing costs. But you'll regain the equity as you repay the loan amount and as the value of your home increases.

What should I watch out when refinancing?

10 Mistakes to Avoid When Refinancing a Mortgage
  • 1 - Not shopping around. ...
  • 2- Fixating on the mortgage rate. ...
  • 3 - Not saving enough. ...
  • 4 - Trying to time mortgage rates. ...
  • 5- Refinancing too often. ...
  • 6 - Not reviewing the Good Faith Estimate and other documentats. ...
  • 7- Cashing out too much home equity. ...
  • 8 – Stretching out your loan.

Does refinancing hurt your credit?

Refinancing will hurt your credit score a bit initially, but might actually help in the long run. Refinancing can significantly lower your debt amount and/or your monthly payment, and lenders like to see both of those. Your score will typically dip a few points, but it can bounce back within a few months.

Can I refinance my home after 6 months?

Rules for refinancing conventional loans

In most cases, you may refinance a conventional loan as soon as you want. You might have to wait six months before you can refinance with the same lender. But that doesn't stop you from refinancing with a different lender. An exception is cash-out refinances.

Can I refinance twice in a year?

There's no legal limit on the number of times you can refinance your home loan. However, mortgage lenders do have a few mortgage refinance requirements that need to be met each time you apply, and there are some special considerations to note if you want a cash-out refinance.

Does refinancing add years to your mortgage?

Refinancing doesn't reset the repayment term of your loan, but it does replace your current loan with a new loan. You may be able to choose from different offers for your new loan depending on your goals, including a longer or shorter repayment term.

Does refinancing affect taxes?

Refinance loans are treated like other mortgage loans when it comes to your taxes. You may be able to deduct certain costs, like mortgage interest, but only if you itemize your deductions. If you take the standard deduction (which most filers do), then your mortgage refinance won't affect your taxes one way or another.

What is the minimum FICO score needed to refinance a mortgage?

Just like with your original mortgage, the higher your credit score, the better your rate. Most lenders require a credit score of 620 to refinance to a conventional loan.

Does refinancing require an appraisal?

You almost always need an appraisal before you complete a mortgage refinance. However, your lender may waive the refinance appraisal condition if you have an FHA, VA or USDA loan.

What should you not tell a mortgage lender?

10 things NOT to say to your mortgage lender
  • 1) Anything Untruthful. ...
  • 2) What's the most I can borrow? ...
  • 3) I forgot to pay that bill again. ...
  • 4) Check out my new credit cards! ...
  • 5) Which credit card ISN'T maxed out? ...
  • 6) Changing jobs annually is my specialty. ...
  • 7) This salary job isn't for me, I'm going to commission-based.

Is there closing cost on a refinance?

What are refinance closing costs? Closing costs are lender fees and third–party fees you pay when getting a mortgage. You have to pay these on a refinance, just like you did on your original mortgage. Closing costs aren't a set amount, though.

How much are closing costs on a refinance 2020?

Mortgage refinance closing costs typically range from 2% to 6% of your loan amount, depending on your loan size. National average closing costs for a refinance are $5,749 including taxes and $3,339 without taxes, according to 2019 data from ClosingCorp, a real estate data and technology firm.

Do I need proof of income to refinance my house?

You'll need to submit your most recent W-2 form when you apply for a refinanced mortgage loan. The lender will use this information to see how much money they're willing to lend to you in the first place. ... The more income you can prove, the more likely you are to get a better home refinance mortgage.

What happens to my old mortgage when I refinance?

When you refinance the mortgage on your house, you're essentially trading in your current mortgage for a newer one, often with a new principal and a different interest rate. Your lender then uses the newer mortgage to pay off the old one, so you're left with just one loan and one monthly payment.

How much money can I get in a cash-out refinance?

For a conventional cash-out refinance, you can take out a new loan for up to 80% of the value of your home. Lenders refer to this percentage as your “loan-to-value ratio” or LTV. Remember, you have to subtract the amount you currently owe on your mortgage to calculate the amount you can withdraw as cash.

How long do you have to live in a house before you can rent it out in Texas?

You should live in your primary residence for a minimum of 12 months before renting it out in order to stay in the good graces of your lender. They will consider extenuating circumstances, however, so be upfront and discuss your options to avoid being accused of mortgage fraud.

How long do you have to live in a house before you can rent it out UK?

The landlord must allow you to stay in the property for a minimum of 6 months. Most landlords offer tenancies for a fixed term of 6 or 12 months.

How long do you have to live in a house before you can rent it out NZ?

If you want to use your KiwiSaver funds for a deposit, you'll need to commit to live in the property for at least six months before you rent it out. For a loan application to be successful, you'll also need to show you have enough income to meet the repayments on the new mortgage as well as your existing debt.

Do you pay escrow when refinancing?

When you refinance a loan, the original escrow account remains with the old loan. ... All the property tax and insurance payments you have made to that account, since the last payment was made, will be returned to you, usually within 45 days via wire transfer or check.