Mortgage Refinancing After Home Purchase Waiting Period Guidelines

This BLOG On Waiting Period To Do A Mortgage Refinancing After Purchase Was Written By Gustan Cho NMLS 873293

There are many folks who need mortgage refinancing after they purchase their home.  There are various reasons why they seek a refinance mortgage after closing their home.

Here are the reasons why some homeowners need to do a mortgage refinancing as soon as possible:

  • There are home buyers who could not qualify for a regular FHA or Conventional Loan so they closed with a higher interest NON-QM Loan
  • Reason to refinance may be to get a non-occupant co-borrower out of the loan
  • Divorce and divorce decree may mandate for the person who is awarded the home to refinance the ex-spouse out of the mortgage note
  • Some folks have higher interest rates due to having lower credit scores when they first purchased the home
  • Many homeowners do not like the FHA Mortgage Insurance Premium and like to refinance their FHA Loan into a Conventional Loan
  • Homeowners may need funds and tap into the equity in their homes by doing a cash-out mortgage refinancing

In this article, we will discuss and cover Mortgage Refinancing After Home Purchase Waiting Period Guidelines.

Minimum Credit Score Requirements On Mortgage Refinancing

Mortgage Refinancing

  • FHA only requires a 580 credit score
  • Fannie Mae and Freddie Mac require a 620 minimum credit score
  • VA does not have a minimum credit score and minimum credit score requirements is up to the lender.
  • There is no credit score requirements on VA Loans
  • However to get an approve/eligible per Automated Underwriting System Findings a 580 credit score for VA Loans is recommended
  • The higher the credit score is, the lower mortgage interest rates will be on all loan programs

Many folks are under the impression that government loans are not affected with pricing adjustment on lower credit scores because they are insured by a government entity.

Government loans are FHA Loans, VA Loans, and USDA Loans

  • However, mortgage interest rate hits does apply to government loans as well as all other loan programs
  • Homebuyers who close on their home and can get their credit scores higher can qualify for a mortgage refinancing at lower rates
  • Refinancing home loans to a lower rate can save tens of thousands of dollars over the course of the mortgage loan. 
  • However, there are minimum waiting periods to refinance mortgage after a home purchase 

For both FHA insured mortgage loans and conventional loans, there is normally a six month waiting period.

FHA To Conventional Mortgage Refinancing

What are government loans are FHA loans, VA loans, and USDA loans

Homebuyers who great credit but had high debt to income ratios were forced to close with a FHA Loans instead of Conventional Loans.

  • FHA allows a mortgage applicant to have debt to income ratios as high as 56.9%
  • FHA also allows for non-occupant co-borrowers to qualify in the event if borrowers has high debt to income ratios
  • With conventional  mortgage loan programs, the maximum debt to income ratios allowed is 45% DTI normally VA Loans allow
  • 100% cash-out refinancing for veteran borrowers
  • The minimum credit score allowed for conventional mortgage loans is 620
  • FHA loans the minimum credit scores allowed is 580 for 3.5% down payment FHA home purchase
  • With FHA Loans, there is upfront mortgage insurance premium as well as annual FHA MIP throughout the life of loan
  • The annual FHA mortgage insurance premium for a FHA loan is 0.85%
  • Many folks who close with a FHA can see if they are eligible to qualify for a conventional loan

This way they can eliminate the monthly FHA mortgage insurance premium.

VA And FHA Streamline Mortgage Refinancing

Homeowners with a current VA and/or FHA mortgage can refinance with another VA and/or FHA Loan with Streamline

Refinance.Streamline Refinance Mortgages are available for both VA Home Loans and FHA Loans:

  • With our special streamline mortgage refinancing, there are no credit scores required, no income verification, and no appraisal required on VA and/or FHA Loans
  • Borrowers can have derogatory credit and recent late payments
  • However, borrowers cannot have been late on mortgage payments in the past 6 to 12 months
  • On late payment of 30 days late is allowed in the past 12 months
  • However, borrowers need to have been timely in the past 12 months only with their mortgage payments
  • Borrowers do need a job, however, income will not be verified
  • It is a very simple straight forward fast refinance mortgage program for those who have a VA or FHA  insured mortgage loan

Again, the waiting period to participate in the VA or FHA streamline refinance mortgage program with no overlays is six months from the original mortgage loan.

Cash-Out Refinance Mortgage Loans

Why VA and FHA improve mortgage refinancing

Homeowners can do a cash-out mortgage refinancing for FHA, VA, and Conventional loans. 

  • The maximum amount of cash-out allowed on FHA insured mortgage loans is 85% loan to value
  • The maximum cash-out on conventional mortgage loans is normally 80%
  • There are some lenders that will do up to a 85% loan to value on a conventional mortgage loan while there are other lenders that will limit their cash-out mortgage loans to 75% loan to value
  • The Veterans Administration allows 100% LTV on cash-out mortgage refinancing
  • Homeowners who just purchased a home an are intending on doing major renovations to property hoping the market value will go up and intend on doing a cash-out refinance the following apply:
  • There is a minimum of a six month seasoning requirement with a quick cash-out refinance mortgage on conventional loans
  • FHA Loans require a one year waiting period to qualify for FHA Cash-Out Refinance Loans

Homeowners who need to qualify for mortgage with a direct lender with no mortgage overlays on government and/or conventional loans can contact us at GCA Mortgage Group at 262-716-8151 or text us for a faster response. Or email us at Gustan Cho Associates has no lender overlays on FHA, VA, USDA, and Conforming Loans. We are available 7 days a week, evenings, weekends, and holidays.

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