Refinancing your mortgage? These factors will determine how long it takes

Mortgage refinancing Refers to the process of getting a new home loan to replace your existing one. You may want to go this route to lower your interest rate, lower your payments, or cash out some of your equity. A mortgage refinance can offer many attractive benefits to homeowners, but it doesn’t necessarily happen overnight.

In fact the process of completing the refinance can be quick or drawn out. So how long can you expect it to take? In this article, we’ll detail what you should know, including turnaround times and how mortgage refinancing works.

If you think a mortgage refinance might work for you, start by answering a few short questions to determine your eligibility.

How long does it take to refinance a mortgage?

The The mortgage refinancing process According to Rocket Mortgage, it usually takes between 30 and 45 days. Here’s what the process looks like.

Apply for a new loan

After reviewing your refinancing loan options, you should apply for the new loan you want. You can do this with your existing lender or a new lender. It’s always a good idea to shop around and get a few quotes so you can find a competitive deal.

The application process will likely be similar to what you experienced with your original mortgage. You must provide your income, assets, credit and debt information along with proof of what you claim (such as W2, tax returns, bank statements, etc.).

Once you provide all the required information, the lender will review it and let you know if you are pre-approved.

You can explore your loan options with Rocket Mortgage online now or use the table below to start researching lenders.

Consider locking in your mortgage refi interest rate

If you are pre-approved, many lenders will give you the option to lock in the interest rate. By doing this, you can ensure that you get to the end refi rate You are eligible for this at the time of your application.

A rate lock may be a good idea when mortgage refinance rates are expected to rise in the near future. Without a rate lock, your rate could go up, your payment could go up and you could lose your approval or Denying savings on a mortgage refinance All in all

Rate locks will come at an additional cost that may vary based on the lock period you choose.

Underwriting

Next comes the underwriting. At this stage, your lender will verify all your information and make sure that your loan meets its requirements. They will also look at your property and need a home appraisal.

Home assessment

Your lender will order a home appraisal, and the appraiser will make an appointment to come to your home. During their inspection, they will perform inspections as needed to estimate the value of your property. The amount will then be reported to your lender.

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If everything goes well in the previous steps, the loan will be closed. You must review and sign all loan documents and make any payments Closing costs Because of that. Mortgage refi closing costs Usually 2% to 6% of the loan amount.

Once the loan is closed, you can enter a right-to-resend period. “Most primary residence mortgage refinance transactions have a three-day right of rescission between signing the loan documents and loan funding,” says Ken Sisson, realtor and associate broker at Coldwell Banker Realty.

After the withdrawal period is over, the loan amount will be disbursed and your principal mortgage will be paid off. If you are performing a Cash-out refinancing, you will get the remaining surplus funds after paying off your existing debt. From there, you’ll start making payments on the new loan.

What could slow down the refinancing process?

A few different reasons can lead to a pulled-out mortgage refinancing process.

“The main factor that can affect transaction speed is responsiveness,” said Raul Hernandez, residential mortgage loan originator at Competitive Home Lending.

He adds, “With advances in technology for supporting loan documents, 1-hour underwriting and electronic delivery of closing documents, the process is faster than ever. However, the borrower, appraiser, title company, or any other party involved can add days to the closing deadline.” “

According to Sisson, a common delay occurs when underwriters run into problems with a borrower’s paperwork.

He says, “Very rarely will a refinance be fully approved and closed during the first pass through underwriting, so most refinance files will go through the underwriting department at least twice, sometimes more. Underwriting turn-around times are longer. Refinance transactions will take longer. ”

What can speed up the refinancing process?

With an understanding of what slows down the process, how can you speed it up?

“The best advice to speed up the loan process is to work closely with loan officers and loan processors and be responsive,” says Hernandez. “Processing will be delayed after hours, weekends, or days after the lender’s initial request for submitting the required loan documents. This is especially true when there is a federal holiday for the account during the processing period.”

This helps ensure that your paperwork is clean and organized.

“If there’s documentation that’s confusing in some way, or not straightforward, that can cause more passes through underwriting. It’s better to provide what’s requested and nothing more or less,” Sisson says.

Mortgage refi deadlines can vary so ask around

While 30 to 45 days is considered a typical timeframe for mortgage refinancing, processing times can vary greatly depending on the lender you choose, the type of loan you have, and the current market conditions (hot or cold).

You can get a better idea of ​​what to expect by asking potential lenders for an estimate of how long it will take to complete a mortgage refinance loan.

Quick Loans can now guide you through the process!