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How Many Times Can You Refinance?

By Robert Melkonyan

Have you owned your home for many years and have refinanced once and are thinking of doing it again? Many people question how many times home refinance is an option and the answer is that you can refinance as often as you would like. Of course, you could refinance often, but it wouldn't be a good idea. If you refinanced your loan every couple of years, you will end up losing money because this process will take a few months to pay for itself.

Refinancing is Not a Catch All Solution

Many people consider home refinance only when they are struggling financially. The reason that many people consider refinancing during this time is because this process is known to save homeowners money. While refinancing is a great way to save money, it is not something that will continue to save you more money each time you do it. In fact, there are costs that are associated with refinancing and in many instances refinancing is something that pays for itself over a period of three to five years, so your savings with this is not always immediate when you factor in the costs of home refinance.

How many times can you refinance? There is truly no limit, but if you are a habitual user of these programs, you will find that many lenders are no longer interested in loaning you money. The reason for this is that repeatedly refinancing is like financing a car, and then two years later trading it in and refinancing another and then another. Eventually you may owe $50,000 on a car that is actually only worth $7,000. This is often referred to as being "upside down" on a loan and it means that you owe more on something than it is worth. Even though you are trying to save money through home refinance, because there are costs associated with it, you can end up owing more money through the process than you save.

This being said, there are cases out there where many people have refinanced twice. This is usually something that is done by someone who owns their home for a long period of time, for instance 20 years. With rate changes being considerable over the last 20 years, it may be possible to benefit from refinancing twice during the ownership of a home, but this is not at all the norm. Most people consider refinancing once during their home ownership adequate because hopefully the second time around they decided on a loan program that would fit their needs long term.

Home refinance is not a catch-all that will solve all of your problems. The fact of the matter is that you can end up in more financial trouble when you continue to refinance than if you never refinanced at all. Don't take the process of home refinance lightly; instead you need to carefully weigh your options as well as the pros and cons of the options before you decide to actually go through with anything. Try not to rush into anything, and if you need help, ask a third party for some advice. Remember not to be pressured into refinancing or not; this is something that you need to consider carefully before you decide to go for it.

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