Here’s How Often You Can Refinance Your Mortgage — and What To Consider Before Doing It Multiple Times

Refinancing your mortgage can help lower your monthly payments and allow you to modify your loan terms. At the same time, it can also be quite costly.

How many times can you refinance? There are a few points to consider.

There’s No Limit On The Number Of Times You Can Refinance

There is no legal limit on how many times you can refinance your mortgage, according to Rocket Mortgage. However, each time you refinance, you’ll need to pay closing costs again. These include inspection fees, title search and insurance fees, appraisal fees, application fees, as well as attorney review fees. The upfront costs associated with refinancing should be taken into account and subtracted from the monthly savings you’ll see as a result of refinancing.

3 Smart Reasons To Refinance

According to Credit Karma, here are some good and bad reasons to refinance your mortgage.

• To Get A Lower Interest Rate: If interest rates have dropped considerably since your loan originated, refinancing is a smart idea. This can save you a bundle on monthly interest charges, help you pay down your principal balance faster and build more equity in your home in a shorter amount of time.
• To Remove Private Mortgage Insurance (PMI): If you originally put down less than 20% on your loan, your lender likely required you to pay private mortgage insurance (PMI). This is added to provide lenders peace of mind in case you can’t make your mortgage payments. Generally, $30-70 per month gets added to every $100,000 you borrow. Once you’ve paid off 20% of your loan, refinancing to eliminate the PMI is a smart idea.  
• To Modify Your Loan Terms: Are you locked into a 30-year fixed-rate mortgage, for example? If you’re looking to modify your loan terms, including the length of the loan, refinancing your mortgage to change your loan terms isn’t a bad idea. A shorter loan term, such as 15 years, will mean higher monthly payments and less interest over the life of the loan. A longer loan term will mean lower monthly payments, but it will take you much longer to pay off the loan and due to higher interest payments.