Buying a new house after recently refinancing ours

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How long do you have to wait to qualify for a new mortgage after buying a home?
6-12 Months Makes All the Difference
What is the Solution?
Related posts:

Wait Before You Can Get New Mortgage After Buying Home

How long do you have to wait to qualify for a new mortgage after buying a home?

If you obtained an owner occupied mortgage to buy the home, you are usually required to wait six months before you refinance the mortgage. If you want to buy a new home, you are typically not eligible for a new owner occupied loan on a different property for a year unless you sell your current home.

When you apply for the new mortgage on a different property, the details of the loan on your existing property are discovered by the lender. As long as you have not sold your current property and that mortgage remains outstanding, you are not eligible for a second owner-occupied mortgage within a year, even if you intend to move out of your current property and live in the new home.

Lenders apply these guidelines because they do not want you to buy a property that you indicated would be your primary residence even though you always intended to move out of the home and use it as a rental property soon after your mortgage closed.

While you may be able to qualify for a non-owner occupied loan within a year, the mortgage terms are more expensive and the qualification guidelines are stricter, which is an important to understand if you want to buy a new home but keep your current one.

One possible way to obtain a second owner occupied mortgage within the specified waiting period is if the new loan is for a second home or vacation property. In this scenario your loan terms including your mortgage rate should be better than the terms for an investment property.

Please note that if you are moving to a different county for a new job, you may be able to qualify for an owner occupied mortgage on your primary residence but you need to provide documents that verify your job transfer.

To summarize, you are usually required to wait six months (for a refinance) or twelve months (for a home purchase unless you sell your current primary residence) before you can qualify for a new mortgage after buying a home or refinancing your current mortgage. If you are willing to meet the required waiting period or if you purchase a property located in a different county, you should be able to qualify for a new owner-occupied loan and benefit from better mortgage terms.

Because mortgage terms and underwriting guidelines, we recommend that you contact multiple lenders in the table below to confirm their qualification requirements. Shopping lenders is also the best way to save money on your mortgage.

Current Mortgage Rates in San Diego1, California1 as of November 14, 2022

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Data provided by Icanbuy. Payments do not include amounts for taxes and insurance premiums. Read through our lender table disclaimer for more information on rates and product details.

Sources

"B2-1.1-01, Occupancy Types." Selling Guide: Fannie Mae Single Family. Fannie Mae, May 1 2019. Web.

« Return to Q&A Home About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. Harry is a licensed mortgage professional (NMLS #236752). More about Harry

Does the occupancy of your new home loan impact your loan options for the next 6 months? Yes, yes and absolutely yes it can. Occupancy intent is atop the radar of all lenders and for a very good reason.

Occupancy refers to the manner in which a borrower will occupy the home. For example, the 3 options are:

owner occupied
non owner occupied
vacation home

Home lending has forever been concerned with occupancy. However, more recently mortgage investors increased their interest in occupancy. As a result, their evaluation methods for validating a borrowers stated occupancy intent are more in depth. Specifically, investors now require mortgage underwriters analyze a Phoenix home loan applicant’s most recent 12 months home loan activity.

6-12 Months Makes All the Difference

Underwriters look for a few critical details during their occupancy review:

Has the Arizona loan applicant completed a mortgage transaction in the past 12 months?
Was the transaction a primary residence?

A “yes” to both does not mean all best are off. However, it does mean you have more work ahead. Underwriters must confirm no occupancy fraud occurs. In part, they do this by asking about the previous transaction as well as the motive for the new transaction.

Borrowers in this situation must explain why their intent to occupy has changed drastically in recent months. Typically, borrowers that refinanced or purchased their primary within the previous 6 months have a tougher time getting approved for the 2nd primary purchase. However, depending on the circumstances it is entirely possible to do so.

What is the Solution?

Have a conversation with your Arizona Mortgage Lender regarding your future plans when refinancing. If seriously considering a new home purchase in the near future, make sure the refinance is set up in a way that works later for your purchase.

If you are in a spot where an extraordinary circumstance caused you to buy a new primary, work with your Phoenix Mortgage Lender to document what happened.

By Jeremy House
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