You don't have to start over with a 30-year payment plan, by the way. Let's say you got a 30-year fixed three years ago, and you want to refinance now, but still pay off the loan 27 years from now. That's known as amortizing the loan over 27 years. Bankrate's mortgage calculator can help you figure out what your monthly payments would need to be.
The mortgage calculator's second item, "mortgage term," can be changed. The default is 30 years, but you can change it to another number of years. Press the "show/recalculate amortization table" button and there you go -- it recalculates your monthly principal and interest, and gives you a long amortization table, to boot.
If you refinance now, it probably won't hurt your chances of getting a mortgage a few months or years from now. Make sure your new loan doesn't have a prepayment penalty, and let the broker or loan officer know what your plans are.
Is it too soon to refinance?
Q: I bought a house last year and my interest rate is 6 percent. Is it worth refinancing now, after less than one year?
Q: I am in year one of a 30-year fixed mortgage of $400,000. My rate is 6 percent. I anticipate staying in this home for at least seven more years. When does it make sense to refinance?
Q: We've owned our home for six months with a fixed rate of 6.5 percent. When can we look to refinance? Is it too early to refinance within the first 12 months of owning a home?
Holden Lewis: No one's going to have a conniption fit if you refinance a brand-new mortgage. If you calculate your break-even point and decide that refinancing is right for you, go ahead and do it.
This applies even if the loan has a prepayment penalty. Just count the penalty as another mortgage fee. In many cases, you'll grudgingly conclude that it's better to wait until you're clear of the prepayment penalty period.