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In December 2015, I closed on a mortgage with a higher than ideal interest rate. I would like to refinance as soon as I file my taxes because my income from 2015 will qualify me for a much better rate (self employed). I won't go into the full details, but I assure you that this course of action was my best option.

Anyway, my mortgage broker is telling me that the Occupancy Affidavit prevents me from refinancing for a year, but I don't see how that is possible. It states that I must move in within 60 days, and I must lived here for 12 months. Both are true, even if I refi. If it matters, the state is Colorado.

Also, the Closing Disclosure says "No" for prepayment penalty.

  • State the question. – Nathan L Jan 12 '16 at 20:00
  • Is what I am being told true and the Occupancy Affidavit is preventing me from refinancing? – Ryan Jan 12 '16 at 21:16
  • That's bizarre, because Occupancy Affidavits generally have nothing to do with that. Feel free to ask for clarification and read a copy directly. Some lenders may stipulate they won't refinance a mortgage that is less than X months old, but that has nothing to do with occupancy. Sure, check out that document, but if you can't refinance for X months then it's due to something else - if it's even true. Also, in the agreements you signed, you might want to look for something called "recapture" - a fee charged by the broker if you refi too soon (they lose their fee from the lender). – BrianH Jan 12 '16 at 21:47
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Mortgage broker is not your friend. His/her commission will be yanked if you refinance too soon, usually within the first 6-12 months. The mortgage broker is vested in you not refinancing.

You need to read through all the documents you've signed, and probably have a lawyer help you understand the details, as each word matters. But what you ultimately should be looking for is prepayment penalty. If there's none - you can probably (IANAL) refinance. Keep in mind that you'll be costing your broker his/her earnings on the original loan.

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    The Closing Disclosure says "No" for prepayment penalty. – Ryan Jan 12 '16 at 21:18
  • Keep in mind that you will also be charged those loan and closing costs again. – mhoran_psprep Jan 13 '16 at 3:59

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