Can You Sell a Refinanced House?

Refinancing gives homeowners the chance to pay the amount of their prior mortgage by securing another loan. The mortgage financing with this new loan can come with new terms and a different – often better – interest rate from the old one.

It can seem like a big decision, even though there are many valid reasons for you to refinance your home. Refinancing even has several advantages, and you can accomplish a lot if you refinance at the right time. But can you sell your home under these new, different terms?

Can I Sell My Home After Refinancing?

Refinancing a mortgage means that the homeowner ends their current mortgage contract by trading in their loan and applying for another one that they hope comes with better interest rates and mortgage terms. The most common purpose for refinancing is that the homeowner is trying to take advantage of lower rates; other reasons include financing a remodel, paying off debts, or looking to switch mortgage providers.

You can sell your house right after refinancing if the mortgage contract does not prohibit this action. One term of note, in this case, is “owner-occupier” (OO or owner/occ). It’s a label mortgage brokers and lenders use when negotiating terms of a mortgage loan to mean that the borrower is also the primary resident of the property to be mortgaged. They view owner-occupants as lower credit risks and thus give them access to the best mortgage rates. 

Before agreeing to refinance, the lender will ask what you plan to do with the funds. Your lending institution may have to change the terms of your original mortgage agreement. They can agree to refinance your home with a second mortgage, a Home Equity Line of Credit (HELOC), or a loan or line of credit. 

Why Sell After Refinancing?

As we’ve seen, refinancing isn’t a negative, and though a lending institution will ask why you’re doing it, they won’t always prohibit this action. They also won’t always make you follow strict clauses or terms related to the sale of the home! If your mortgage lender agrees to lower interest rates without terms that prevent the sale of your property during a certain period, you can sell. 

Refinancing is a way you can access the equity in your home to improve it. Lenders will let you borrow money against the equity, which is the part you own, and you can use this money to invest elsewhere. Before committing to your sale, do a cost-benefit analysis to confirm that refinancing makes fiscal sense. 

If you’re refinancing as a way to fund necessary repairs and renovations to make the property, a plan is necessary. If you need to make any costly roof or foundation repairs before you can place the home on the market, refinancing can get you there.