What Is The Waiting Period To Do A Mortgage Refinancing After Purchase

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.

Minimum Credit Score Requirements On Mortgage Refinancing

  • FHA only requires a 580 FICO 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.
  • CrossCountry Mortgage has a 580 minimum credit score requirement for VA Loans.
  • The higher your credit score is, the lower your mortgage interest rates will be.
  • 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.
  • However, mortgage interest rate hits does apply to government loans as well.
  • Home buyers who close on their home and can get their credit scores higher can qualify for a mortgage refinancing where they can save thousands of dollars over the course of the mortgage loan. 
  • However, there are minimum waiting periods to refinance mortgage just after a home purchase mortgage loan. 
  • For both FHA insured mortgage loans and conventional loans, there is normally a six month waiting period.

FHA To Conventional Mortgage Refinancing

Home buyers who great credit but had high debt to income ratios were forced to close with a FHA insured mortgage loan instead of a conventional mortgage loan.

  • FHA allows a mortgage applicant to have debt to income ratios as high as 56.9% and also allows for non-occupant co-borrowers to qualify in the event if the mortgage loan applicants has high debt to income ratios. 
  • With conventional  mortgage loan programs, the maximum debt to income ratios allowed is 45% DTI.
  • The minimum credit score allowed for conventional mortgage loans is 620 FICO .
  • FHA loans the minimum credit scores allowed is 580 FICO . 
  • With FHA insured mortgage loans, there is upfront mortgage insurance premium throughout the life of the loan and this is quite costly. 
  • The annual FHA mortgage insurance premium for a FHA loan is 1.35% on the balance of the loan. 
  • Many folks who close with a FHA insured loan can see if they qualify for a conventional loan so they can eliminate the monthly FHA mortgage insurance premium.

2017 UPDATE: FHA ANNUAL MORTGAGE INSURANCE PREMIUM GOT REDUCED TO 0.85% FROM 1.35% WHEN THIS BLOG WAS WRITTEN

FHA Streamline Mortgage Refinancing

Homeowners with a current FHA mortgage can refinance with another FHA Loan with a FHA Streamline Refinance.  With our special FHA streamline mortgage refinancing, there are no credit scores required, no income verification, and no appraisal required.  You can have derogatory credit and recent late payments.  However, you cannot have been late on your mortgage payments in the past 6 to 12 months.  On late payment of 30 days late is allowed in the past 12 months, however, you need to have been timely in the past 12 months.  You do need a job, however, your income will not be verified.  It is a very simple straight forward fast refinance mortgage program for those who have a FHA  insured mortgage loan.  Again, the waiting period to participate in the FHA streamline refinance mortgage program with no overlays is six months from the original mortgage loan.

Cash Out Refinance Mortgage Loans

You 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.
  • If you just purchased a home an are intending on doing major renovations to your property hoping the market value will go up and intend on doing a cash-out refinance, there is a minimum of a six month seasoning requirement with a quick cash-out refinance mortgage.
The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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