If a large portion of your monthly mortgage payment is going towards interest rather than your principal, you may want to get a refinance. Refinancing is a common route many homeowners take to lower their monthly mortgage payments as it allows them to secure a new mortgage at a lower interest rate.
Refinancing can also help you build equity in your home faster. With such advantages, you can ask yourself an important question: How long does a refinancing take?? According to Ellie Maes Origination Insight ReportsAs one of the largest companies in the country helping lenders take out mortgages, the average time to refinance a home in 2020 is somewhere in between 35 and 50 days. While this is just an average, it can serve as a good mortgage refinancing timeframe to help you plan.
When you begin your refinancing journey, it is important to understand what goes into the home refinancing process. The following explains the refinancing steps, examines the time it takes to refinance a house, and gives some tips to speed up your refinancing process. Read through to learn about each step in the refinancing process and how long each step takes, or use the list below to navigate to a section of your choice.
The process of mortgage refinancing
If you RefinancingYou will follow similar steps as you would to secure your first home loan. This is why refinancing your home can take anywhere from 35 to 50 days. While a couple of weeks to over a month may seem a painful long wait for a new mortgage, most of the time it involves waiting for your records to be cleared, which means you don't have to do any hard work.
Below are the Steps To Refinance A Home.
1. Research various lenders
As with any big financial decision, it is important that you do your research. There are numerous lenders in the market looking to attract new customers in order to make a profit. As a potential customer, you have the opportunity to choose a lender who will work for you and who have your interests in mind. Some Things To Look For When Researching Different Lenders Are:
How communicative they are
Your interest rates and terms and conditions
Reviews and testimonials posted online
Your customer service
How long does your refinancing process normally take?
When looking for lenders, it is always worth checking with your current mortgage lender as they already have your information, which can speed up the process. Your current lender may also be willing to waive the refinancing fee, which will save you money on closing costs.
To streamline your research process, create a spreadsheet or graph of each lender you contact. Make a note of their contact information, the prices they offer, and other relevant information. A good loan officer will also help you answer important questions like "Should You Refinance Your Mortgage When Interest Rates Are Falling?"And" What type of refinancing is best for me? "The time it takes to complete this step is entirely up to you – you can spend a few hours looking for a lender, or a few days or weeks.
2. Fill out your loan application
Once you've found a lender, it's time to fill out your loan application. This process typically takes a few hours but can be sped up if you are organized and have all of your information ready. If you have a reliable loan officer, this step will usually be as seamless as possible, making sure that you have all of the paperwork you need to successfully complete your refinancing application. Some of the documents you may need to complete your loan application include:
Proof of income: Pay slips, bank statements, tax returns, tax forms (W-2, 1099), bank statements
Insurance: Homeowner and property insurance
Identity check: Social security number, birth certificate, driver's license, telephone number, email address
Debt declarations: Student loans, car payments, current mortgage, credit card statements
Credit information: Credit score, credit report, credit statement letter
3. Get a loan estimate
Once you have submitted your loan application, lenders have it three working days to give you a loan estimate. A credit estimate will not approve or deny your loan, but it will provide you with vital information in the event the loan is approved. The information about a loan estimate includes:
Estimated interest rate
Total closing costs
Estimated costs for taxes and insurance
How interest rates might change in the future
Early loan repayment penalties (if applicable)
Negative depreciation (if applicable)
Once you have checked your credit estimate, it is your decision to move on with this lender. All lenders are required to use similar credit assessment forms so that borrowers can easily compare the terms and conditions provided by different lenders.
4. Get a home appraisal
In some cases, lenders may ask for a home valuation if your loan requires it. Typically, older homes require new home appraisals because the value of your home has an increased likelihood of changing over time. Newer homes usually don't require a home valuation. ONE House valuation determines how much your home is worth, which is why you want it to look its best on valuation day. If you get a low rating it can negatively affect the terms of your loan.
To speed up this process, make sure that you are available for your home appraisal at the earliest possible time and that you are prepared for all costs. On average, home reviews cost somewhere in between $ 300 and $ 400. However, the cost may change depending on various factors, e.g. B. Your place of residence and the size of your property. In addition, some loans, e.g. B. those supported by USDA, VA and FHA do not have a home valuation.
Underwriting is usually the longest step in the refinancing process and takes somewhere in between five and eight daysor even a couple of weeks. For this step, all you have to do is sit patiently and wait. While UnderwritingYour lender will go through your financial history to make sure you can afford your new mortgage and pay it off in full and on time. The information that is verified includes your credit history, credit report, bank statements, assets, income, home valuation results, and debt.
To ensure this step goes smoothly and quickly, make sure that all of the documents that you need to submit with your loan application are filled out correctly and completely. This ensures that there are no or minimal delays preventing you from getting a new home loan.
6. Review your final statement
A final disclosure will be released once your lender completes the underwriting. Your closing statement is the final form that lists the fees and costs that will be due upon closing, as well as information about your new loan, such as: B. Your monthly payment and the APR. During this step, fully review the final disclosure to make sure there are no surprises.
7. Close your loan
The final and final step is to close your new loan. After you have checked your new loan terms and conditions and are happy with the results, sign on the dotted line and make it official. The closing meeting usually lasts a few hours as your lender reviews the contract and its terms and conditions.
How long does it take to refinance a home?
In order to, How long does it take to refinance a mortgage?? It takes somewhere in between 35 and 50 days to refinance a home. However, the time it takes to refinance your home can depend on a few factors, such as: B. Your organization, communication and the lender you work with.
How to accelerate your refinancing process
In some cases, you may want to refinance your home as soon as possible. If you are in a time crisis, there are several ways to speed up your refinancing process. Something Refinancing tips These can save you time, including:
Organize all of your records and documents before you refinance: Staying organized is important if you want to get your refinance as soon as possible. The lack of a document or the failure to fill out every line of the loan application can lead to time-consuming delays.
Stay in constant contact with your loan officer or insurer: Communication is key, especially if you want to get refinance quickly. We have all been in situations where deadlines were missed because someone did not provide information quickly enough. Make sure you answer all emails, texts, and calls in a timely manner so that your lender expedites the process.
Looking for a Timely Lender: Not all lenders are created equal, which is why you may want to look for lenders who process refinances quickly. Just because they can approve you for a refinance in a short amount of time doesn't mean the terms are favorable. Take your research process seriously and look for lenders who are on time and offer attractive rates and terms.
Signing disclosures and documents immediately upon receipt: By following the home refinancing steps, you can find out that there are numerous forms and documents to sign. The faster you read, sign, and return these forms, the faster you can refinance your mortgage.
Understand all of the costs associated with refinancing: An unexpected hitch on your disclosure form could turn your plans upside down. To avoid this situation, you should understand all of the costs associated with refinancing, such as: B. Closing fees, home appraisal fees, credit report fees, subscription fees, and attorney fees.
Summary: How long does the refinancing process take?
On average, your home can take anywhere from 35 to 50 days to refinance from start to finish. There are numerous steps to take when refinancing, each of which is time-consuming. These are just a few of the steps that take time during the home refinancing process, from researching various lenders to completing a loan application and home appraisal to waiting for the underwriting. Knowing how long it takes to refinance a home can help you plan accordingly so that you can get a new home loan if necessary.