How Long Does a Refinance Take (+ Tips for Speeding Up the Process)
Just like purchasing a new home and applying for a mortgage loan, refinancing can also be quite taxing as it takes up some time and money. A lot of people have asked: how long does it take to refinance a home?
The exact closing time depends on each case, borrower, and lender. While you can’t control some parts of the process, there are some things you can still do to help hasten your refinancing.
How long does it take to refinance a mortgage?
If you’re looking for an estimate, the typical refinance takes around 30 to 45 days before closing. But there is no exact answer for your specific refinance, and not even the loan officer can tell you this. It is because there may be some unexpected issues and case-by-case situations. From the appraisal and inspection stage to other parts of the process.
When you use TurnTimes refinancing services, the average turnaround time is only 21 days. As a direct lender, we have a team of in-house processors, underwriters, and funders, which will make this process much faster.
Your refinancing journey will also be impacted by your property size and finances, which will affect how long it takes to complete. But one thing we have noticed is that lower mortgage rates usually cause a longer average closing time.
Speeding up the refinancing process
So, you have decided that refinancing can be a good thing for you. You’ve done your research and perhaps now is the right time for you to refinance your home. But how can you speed up the process?
· Pick the right to refinance program
The first, and most critical, step to any home refinance is to do your research. Make sure that you choose the right program for your situation and what you need so that the lender will not deny your application. Even if they only need to resubmit it to a different program, this will impede your timeline and cost you money.
But which refinance program is the best one for you? Consider your equity, credit score, and goals. For instance, you may want to go for an FHA streamline if you currently have an FHA loan, or a VA interest rate reduction refinances loan if you’re on a VA loan. Of course, there is also a cash-out refinance if you need to tap your equity.
· Sort out your paperwork correctly
It’s important to have all your paperwork at hand so that you can speed up the process with your lender. Do your research and make a checklist of the requirements for a mortgage refinance, then prepare them accordingly. Missing documents can hold back the refinancing process for at least a couple of days.
There are some additional things you have to provide for finance that you didn’t need to when applying for the initial mortgage. This includes your current mortgage statement and property tax statement, among other things.
Some lenders will also be able to verify your income and assets electronically. This means, with your consent, they can get this info directly from your employer and bank.
· Don’t apply for new credit
The next tip for those trying to refinance faster is to avoid applying for new credit. Even asking for new debt opportunities will cost a few credits from your current score. When you get an offer for a new credit card or loan, we recommend analyzing how they might affect your credit score, which will in turn affect your refinancing process.
Likewise, any debt you have will impact your credit score, so it is best to not take on more debt. Maxing your credit card can damage your score in the long run. Instead, you should focus on repaying any outstanding debts.
· Find out how much your home is worth
Many homeowners fail to regard this step when applying for a mortgage refinance, but it can be useful to know your home’s worth. Lenders will use your home equity to determine the loan amount, so it will benefit you to know this, even if it’s just an estimation.
You can simply use an online home value estimator or ask a real estate agent if you want something more accurate. However, be realistic with this. Or your lender may need to spend time recalculating your refinance rate. Their underwriter would then have to review this, which will take even more time.
· Try to look for programs without an appraisal
Better yet, some refinancing programs do not require you to have a home appraisal. This will speed up the process significantly! It takes at least several days to set a schedule with an appraiser, prepares your home, and wait for the report. It may even save you a portion of the closing cost.
Some programs with a no-appraisal policy may be available if you currently have an FHA or VA loan. If you are going for an FHA streamline or VA interest rate reduction refinance loan, you don’t even need to verify your income, which will save you even more time.
In addition, if you are choosing a cash-out refinance and taking up to 70% of the equity, you can apply for a Fannie Mae appraisal waiver. This will let you forego the home appraisal step.
· Ask for the refinance turn times
When you are looking for the right lender to refinance your home loan, it can be a good idea to inquire about the average turn times. This could vary from one lender to the next, ranging anywhere between 1 to 2 months.
On a similar note, you can never go wrong with thorough research and comparison of multiple lenders. Don’t be satisfied with only a couple of quotes, especially because some lenders may give out higher rates when the interest rates are low due to the increasing demand.
· Be a fast responder
One avoidable factor that might hold up your home refinancing process is delayed responses. Whether from you or your lender. You can’t change how promptly your lender responds to your actions, but you can intentionally be a fast responder.
Always watch out for any calls from the related parties: the loan officer, loan processor, the underwriter. For example, these people might call you to talk about the home appraisal, providing extra documents, or your employment history.
Once everything has been verified, you will get a closing disclosure, usually 3 working days before when you are set to sign the loan. Double-check everything and set up a time with your lender for the closing!
These are some of our best tips and tricks to help you quicken the process of refinancing your home. It also helps to know why you are applying for a mortgage refinance, which can help find and decide the best program for you.