The Mortgage Refinance Process

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If a majority of your monthly mortgage payment goes toward interest rather than your principal balance, you may be looking to refinance. Refinancing is a common route many homeowners take to lower their monthly mortgage payment because it allows them to secure a new mortgage with a lower interest rate.

Refinancing can also help you build equity in your home faster. With benefits like these, you may be left asking yourself one important question: how long does a refinance take? According to Ellie Mae’s Origination Insight Reports, one of the country’s largest companies that helps lenders originate mortgages, the average time it takes to refinance a home in 2020 is anywhere between 35 and 50 days. While this is just an average, it can serve as a good mortgage refinance timeframe to help you plan.

As you begin your refinancing journey, it’s important to understand what goes into the home refinance process. Below, we’ll go over the steps to refinancing, have a more in-depth look at how long it takes to refinance a house, and offer some tips on how to speed up your refinance process. Read through to learn about each step of the refinance process and how long each step takes, or use the list below to navigate to a section of your choice.

The Mortgage Refinance Process

When you refinance, you follow similar steps to the ones you took when securing your initial home loan. This is the reason why refinancing your home can take anywhere between 35 and 50 days. While a few weeks to over a month might seem like a painfully long time to wait for a new mortgage, most of the time is spent waiting for your paperwork to be cleared, which means no hard work on your end. 

Steps to Refinancing

Below are the steps to refinance a home.


1. Research different lenders

As with any big financial decision, it’s important to do your research. There are numerous lenders on the market looking to bring in new customers to make a profit. As a prospective customer, you have the power to choose a lender that works for you and has your best interests in mind. Some things to look for when researching different lenders include:

  • How communicative they are
  • Their interest rates and terms and conditions
  • Reviews and testimonials posted online
  • Their customer service
  • How long their refinance process typically takes

When researching lenders, it’s always worth consulting with your current mortgage lender, as they already have your information on file, which can speed up the process. Your current lender might also be willing to waive the refinance fee, which will save you money on closing costs. 

To streamline your research process, make a spreadsheet or chart of each lender you contact. Make a note of their contact information, rates they offer, and any other pertinent information. A good loan officer will also help you answer important questions, such as, “should you refinance your mortgage when interest rates drop?” and “what type of refinance is best for me?” The time it takes for this step is entirely up to you—you can spend a few hours looking for a lender or a few days or weeks.

2. Complete your loan application

Once you’ve found a lender, it’s time to complete your loan application. This process typically takes a few hours but can be expedited if you’re organized and have all of your information ready. If you have a reliable loan officer, they will typically make this step as seamless as possible and ensure you have all the documentation you need to successfully complete your refinance application. Some of the documents you might need to complete your loan application include:

  • Proof of Income: Pay stubs, bank statements, tax returns, tax forms (W-2, 1099), retirement account statements
  • Insurance: Homeowner’s insurance and title insurance
  • Identity Verification: Social Security number, birth certificate, driver’s license, phone number, email address
  • Debt Statements: Student loans, car payments, current mortgage, credit card statements
  • Credit Information: Credit score, credit report, credit explanation letter

3. Receive a loan estimate

Once you submit your loan application, lenders have three business days to provide you with a loan estimate. A loan estimate doesn’t approve or deny your loan but provides you with important information should the loan be approved. Information on a loan estimate includes:

  • Estimated interest rate
  • Monthly payment
  • Total closing costs
  • Estimated cost of taxes and insurance
  • How interest rates might change in the future
  • Penalties for paying off the loan early (if applicable)
  • Negative amortization (if applicable)

Once you review your loan estimate, you will be able to make a decision on whether you want to move forward with that lender. All lenders are required to use similar loan estimation forms, so borrowers can easily compare the terms and conditions provided by different lenders.

4. Get a home appraisal

In some cases, lenders might ask for a home appraisal if your loan requires it. Typically, older homes require new home appraisals because your home’s value has an increased chance of changing over a longer period of time. Newer homes typically don’t require home appraisals. A home appraisal determines how much your house is worth, which is why you want it looking your best on appraisal day. If you get a low appraisal, it could negatively impact the terms and conditions of your loan.

To speed up this process, make sure you’re available for your home appraisal at the earliest possible date and to be prepared for any costs. On average, home appraisals cost anywhere between $300 and $400. However, the cost can change depending on a variety of factors, such as where you live and your property’s size. Additionally, some loans, such as those backed by the USDA, VA, and FHA, don’t require home appraisals.

5. Underwriting

Underwriting is usually the longest step in the refinance process, taking anywhere between five and eight days, or even a few weeks. For this step, there’s nothing on your end to do besides to sit patiently and wait. During underwriting, your lender will comb through your financial history to ensure you’ll be able to afford your new mortgage and pay in full and on time. Information that will be reviewed includes your credit score, credit report, bank statements, assets, income, home appraisal results, and debt.

To ensure this step goes smoothly and quickly, make sure all of the documents you have to submit with your loan application are accurate and completely filled out. This will ensure there are no or minimal delays that hold you back from getting a new home loan.

6. Inspect your closing disclosure

A closing disclosure will be issued once your lender has completed underwriting. Your closing disclosure will be the final form that lists fees and costs that are due at closing, along with information on your new loan, such as your monthly payment and APR. During this step, make sure to review the closing disclosure fully to ensure there are no surprises.

7. Close your loan

The last and final step is to close on your new loan. After you review your new loan terms and conditions and are happy with the results, sign on the dotted line and make it official. The closing meeting typically takes a few hours, as your lender will go over the contract and its terms and conditions.

How Long Does It Take to Refinance A House?

So, how long does it take to refinance a mortgage? It takes anywhere between 35 and 50 days to refinance a home. However, the time it takes to refinance your house can depend on a few factors, such as your organization, communication, and the lender you work with. 

How to Speed Up Your Refinance Process

In some cases, you may want to refinance your home as soon as possible. If you’re in a time crunch, there are a few ways you can speed up your refinance process. Some refinance tips that can save you time include: 

  • Organizing all of your paperwork and documents before you refinance: Staying organized is essential if you want to receive your refinance as soon as you can. Missing a document or failing to fill out every line on the loan application can result in some time-consuming delays. 
  • Staying in constant contact with your loan officer or underwriter: Communication is key, especially if you want to refinance quickly. We’ve all been in situations where deadlines haven’t been met because someone didn’t provide information quickly enough. Make sure you reply to all emails, texts, and calls in a timely fashion to help your lender expedite the process.
  • Searching for a timely lender: Not every lender is the same, which is why you might want to look for lenders that process refinances quickly. However, just because they can approve you for a refinance in a short amount of time doesn’t mean the terms and conditions are favorable. Take your research process seriously and look for lenders that are punctual and offer attractive rates and terms.
  • Signing disclosures and documents right when you receive them: Based on the steps it takes to refinance a home, you can tell there are plenty of forms and documents you need to sign. The quicker you read, sign, and send back these forms, the quicker you can refinance your mortgage.
  • Understanding all costs associated with refinancing: An unexpected expense on your disclosure form can throw a wrench in your plans. To avoid this situation, make sure you know about all the costs associated with refinancing, such as closing costs, home appraisal fees, credit report fees, underwriting fees, and attorney fees.

Wrapping Up: How Long Does the Refinance Process Take?

On average, it can take anywhere between 35 and 50 days from start to finish to refinance your home. There are numerous steps you have to take when refinancing, with each taking up a large chunk of time. From researching different lenders to filling out a loan application and getting a home appraisal to waiting for underwriting, these are just some of the steps that take time during the home refinance process. Knowing how long a home refinance takes can help you plan accordingly, so you can get a new home loan when you need it.

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