How long does it take to refinance a home

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Under normal circumstances, if you ask your lender, “How long does it take to refinance a home?” The answer would probably be 30 to 45 days. But you’re not necessarily unlucky if you have to refinance quickly to get a low rate or take equity out of your home.

Here’s what you can expect when it comes to how long it takes to refinance a mortgage:

How long does it take to refinance

The average time to refinance a home is 30 to 45 days, depending on your situation. However, the actual timeframe for refinancing can range from 15 to 60 days or more.

You could face delays, depending on economic conditions, which could extend the delay. Other factors that determine the length of time to refinance a home include the complexity of your financial situation and the documentation required.

Refinance faster with Credible! We’ll help you avoid many of the pitfalls inherent in the traditional methods that some companies still use to mortgage refinancing processing loan applications.

Our streamlined application process allows you to complete your application and submit your documents digitally, without leaving the platform. Get started now – you’ll have pre-qualified loan rates and an initial fee estimate in about three minutes, without affecting your credit score.

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To find: How Long Can You Refinance: Typical Home Loan Waiting Periods

How to refinance a mortgage

Do not let the number of Steps to refinancing your mortgage intimidate you – the lender does most of the work. But here are the steps needed to refinance your mortgage.

1. Know how much equity you have

The equity in your home is the value of your home minus your loan balance. Here’s a quick way to find out your home equity:

  1. Use your mortgage balance: First, take your total mortgage balance.
  2. Know the value of your home: Then use a recent appraisal or compare similar homes in your area to get the value.
  3. Calculate equity: Now subtract your loan balance from the estimated value of your home and you get your total equity.

Learn more: When to refinance a mortgage: is now the best time?

2. Check the rates

Even small differences in interest rates can add up to thousands of dollars in savings because home loans are for such large amounts. So it’s a good idea to compare rates from several lenders first.

Credible allows you to request prequalified rates from all of our mortgage lending partners in the table below in just a few minutes.

3. Look for lenders and their products

Prices only tell part of the story. You should also study the types of loans offered by lenders, their terms and fees. Credible offers transparency on lender fees that other comparison sites do not.

Common costs associated with refinancing your home include:

  • Assessment fees
  • Credit file fees
  • Loan origination fees
  • Title search and insurance fees
  • Subscription fees
  • Discount points
Costs estimated cost
Loan origination fees 0.5% to 1.5% of the loan amount
Assessment fees $ 300 to $ 500
Title insurance costs $ 1,000
Credit file fees $ 30 to $ 50
Prepaid interest charges Depends on your interest rate and your loan closing date
Registration fees Varied
Mortgage points Depends on the number of points you pay
(1% of your mortgage amount equals 1 point)

See: 4 of the best mortgage refinancing companies

4. Gather all the documentation

Your lender should check your income, assets, liabilities, credit, and the value of your home. So be prepared to submit the following documents:

  • Most recent mortgage statement
  • Two most recent pay stubs
  • Value of the last two years of W-2 and / or 1099 statements
  • Government benefit award letters
  • Tax returns for the last two years
  • Bank and investment account statements
  • Proof of home insurance
  • Divorce judgment, if you pay or receive alimony and / or child support

Advice: Credible streamlines the application process for you. We automate the collection of documents such as pay stubs, bank statements and tax documents. Plus, licensed loan officers are available if you need further assistance.

5. Request your refinance

Depending on the capabilities of your lender and your preferences, you can apply online or by using a paper application. Either way, the app requests detailed information about borrowers and their current mortgage income, expenses, assets, liabilities, and mortgage obligations.

To find: How Often Can You Refinance Your Mortgage?

6. Receive a loan quote

Your lender will provide you with your loan estimate within three business days of submitting your request. Among other information, the loan estimate discloses the interest rate, payment amount, and expected closing costs for your loan.

7. Have your home appraised

Not all refinance loans require an appraisal, but in many cases the lender orders one. Expect the lender to have the appraisal report in about a week after the appraiser sees your home.

Learn more:

8. Full subscription

After submitting your loan application and all of the documents requested by your lender, the lender will check your income, debts, assets, and credit to determine if you qualify for the loan. If you qualify, they will also decide how much you are eligible to borrow.

How long does the subscription last? Subscription can take anywhere from a few days to several weeks, but the average is a week or two. Your lender will issue your approval once the underwriting is complete.

See: Manual Underwriting: Can It Help You Buy A Home?

9. Block your rate

You will want to lock in your interest rate before you take out the loan. Rate lockout secures that rate for a period of time, such as 30, 45, or 60 days, and provides details such as the loan terms, the points you’ll pay to get the offered rate, and an expiration date for the lockout. .

Learn more: Mortgage rate lock-in: how and when to lock in your mortgage rate

10. Sign the documents and close your loan

Your lender will send you a closing disclosure at least three days before the scheduled closing date. The disclosure details the fees associated with your loan, including closing costs. Then you will sign the disclosure and other loan documents on the day of closing.

Keep reading: Refinancing Without Closing Costs: Will It Save You Money?

How to speed up the refinancing process

Every situation is different, but there is a lot you can do to avoid delays and even speed up the process:

    1. Use an online platform. Credible allows you to quickly compare multiple refinancing options and streamline your application and document submissions, which can save you time.
    2. Choose a loan and stick to it. Starting from scratch with a new lender after you’ve already applied can add weeks to the time it takes to close.
    3. Keep in close contact with your mortgage representative. Stay in touch with your representative and respond to requests for information and documentation immediately. Keep copies of all your correspondence.
    4. Be prepared to explain credit defaults. Write a letter detailing the circumstances surrounding late payments, collections and write-offs, and the steps you took to resolve them. It is also useful to indicate how your current financial situation makes it unlikely that these problems will recur.
    5. Avoid applying for new credit. Credit checks may lower your credit rating slightly, and new debt will increase your debt-to-income ratio. Either situation could reduce your chances of qualifying for your refinance loan.
    6. Write a letter explaining the gaps in the job. Unexplained employment interruptions can cause a lender to question whether you have the stable income to make your payments on time.
    7. Make sure your home is in compliance with the regulations. Make sure your home meets zoning requirements, such as proper setbacks for sheds and fences and the location of downspouts. Your home should also comply with local codes pertaining to safety equipment such as smoke and carbon dioxide detectors and stair railings.
    8. Document the improvements. Provide the appraiser with documentation of any significant improvements you have made to your home, especially if they set it apart from similar homes in your neighborhood.
Find out if refinancing is right for you
  • Real rates from several lenders – In 3 minutes, get real prequalified rates without impacting your credit score.
  • Smart technology – We streamline the questions you need to answer and automate the document upload process.
  • End-to-end experience – Complete the entire creation process, from price comparison to closing, all on Credible.

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About the Author

Daria uhlig

Daria uhlig

Daria Uhlig is a Credible associate who covers mortgages and real estate. His work has been published in publications such as The Motley Fool, USA Today, MSN Money, CNBC, and Yahoo! Finance.

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