Many borrowers think that they can refinance their home as often as they would like, but the facts are that this is far from the truth. Many lenders have seasoning requirements that state that borrowers cannot refinance without various penalties within a 1-3 year time frame, and other terms that may prohibit homeowners from refinancing more than once in a single year.
If a lender does not have restrictions against the number of times you can obtain financing in any given year, you will definitely have appraisal issues to contend with. In the current market, values are going both up and down, making it sometimes difficult to gauge home values.
There is also the cost of a refinancing that ranges anywhere from 1-5% with an average of about 3% of the total loan amount each time a new mortgage is taken out. For a $100,000 mortgage, that would be approximately $3000. With each refinance, your terms and interest rates will get progressively worse and more expensive.
In addition, refinancing multiple times in order to get the best interest rate or to simply extract equity from your property, is not a good idea. A home is a long-term investment, and a mortgage needs to be thought of that way as well.
When you are looking to refinance your mortgage, it is always best to shop around with a few mortgage brokers or banks to see where you can get the best rate and terms on your home loan offer. The more work you do upfront the better off you’ll be in the long run it getting the best mortgage possible. Doing it right the first time is always the best way to ensure that your refinance goes right.