Can I (we) refinance if we only had our home for 4 months?

**brenda67** · 01-26-2009, 01:45 PM

A poster mentioned about refinancing to get a lower interest rate on their mortgage..My (our) interest rate is 6% for 30yrs and I would love to get a even lower rate but I don't know if we can since we just bought the house in Oct....Any help would be great..

p.s. We got a VA loan..

**Greebo** · 01-26-2009, 01:48 PM

Minimum tends to be 6 months. A year is usually more like it.

But with 30 yr rates not quite 1% lower... probably not worth it. Especially if you've lost equity and drop into PMI land.

**brenda67** · 01-26-2009, 01:53 PM

Thanks Greebo...I don't understand what you mean by lost equity and drop into PMI land? Could you please explain? Thanks, Brenda

**Greebo** · 01-26-2009, 02:09 PM

Lost equity: Property values, by and large, are dropping. The difference between the market value and what you owe is your equity. If the house is worth $100,000 and you owe $50,000 you have $50,000 in equity. As values drop, equity drops, so...

PMI Land: If you owe > 80% of your houses value at the time of purchase or refinance, you will need Private Mortgage Insurance (you pay, it protects the bank). PMI is about $100/month for $150k borrowed..

**brenda67** · 01-26-2009, 03:01 PM

Thanks..

Our home didn't drop in price nor do we have a PMI...The Va has 100% financing..

**Thevail** · 02-10-2009, 07:36 PM

There are certain costs with refinancing, like closing costs, title costs, blah blah blah..so you'd have to be saving quite a bit of money to bother.

Also realize that fairly, or unfairly, they're going to ding your credit if you try it. Because you bought a house very recently, your debt to income ratio is probably not that awesome so you may have trouble qualifying for that "best" rate too.