Refinancing is the process of replacing an existing mortgage with a new loan. Homeowners refinance to get a lower interest rate, change the terms of their loan, or take cash out of their home. But exactly how long does it take to refinance a house?
You might expect a refinance to be faster than getting your first mortgage, but the approval process for a refinance and an original loan are about the same. Understanding how long a refinance takes and how the process works will help you be better prepared for the steps ahead.
How long does a refinance usually take?
A refinance usually takes six to eight weeks to close, depending on how many people are refinancing or applying for a mortgage at the same time. A refinance took an average of 43 days to close in August 2021, according to ICE Mortgage Technology, a company that provides mortgage management software. In that month, the average time to close a refi ranged from 43 days for conventional loans to 51 days for FHA loans. VA refis took an average of 49 days.
Several factors can affect how long the refinance process takes. For example, delays in getting an appraisal or problems uncovered in the title search can slow the process. The underwriter may also need additional paperwork from the applicant and pause the approval process while waiting for the homeowner to respond.
In some cases, applicants may choose to waive the appraisal to speed the refinance process. The share of refinances using appraisal waivers has grown substantially in the past few years, reaching about 43% for some loans in 2020, according to data from the American Enterprise Institute. While you may be able to refinance without an appraisal, an appraisal could show you have more equity in the house than the lender estimates and increase the amount of cash you can take out.
Refinance mortgage process explained
The refinance mortgage process includes multiple steps. The lender will check your finances to be sure you can afford the payments and confirm the value of the property before approving the loan. Below is a sample timeline for the various steps in the refinance process. Keep in mind, though, how long it takes to refinance a house will depend on your finances and documentation, loan program requirements, whether an appraisal is needed, and the volume of business your lender is handling.
|Initial review||3 days|
|Title search||10-14 days|
After you’ve shopped around for a new mortgage, you must apply with the lender. You’ll have to fill out some paperwork and submit documents covering your income, assets, and debts. Most likely, the lender will require you to submit:
- Pay stubs for the last month
- W-2 forms for the last two tax years
- Tax forms for the last two years
- Banks statements for the previous two months
The lender may require additional documentation if you’re self-employed, earn commissions, or otherwise have an income that varies from month to month.
It may take time to gather all the documents, so getting organized before you apply can speed the process. Many lenders have an online portal where you can upload your documents.
After you apply for the refinance, the lender must send you a loan estimate within three business days. The estimate shows your estimated monthly payment and estimated closing costs.
The lender will order an appraisal of the property to determine its fair market value. An appraiser is an independent expert who will compare the home to others recently sold in the area to determine its value.
The appraiser has to schedule a visit to the home, conduct an inspection, compare data, and write and deliver the report, so it can take a week or more to complete the process. When there’s a high demand for mortgages, appraisers are busy, and it can take longer to get an appraisal.
During the title search, a title professional will go through public records to determine you are the rightful owner of the property. A title search usually takes about two weeks.
Underwriting is the process of examining your financial information to confirm you qualify for the loan. The underwriter will check your credit file, verify your assets, look into your debts, and confirm your employment. The time it takes for the underwriter to complete the process varies. In cases where the finances are simple, it could be just a few days. With complex finances, it could be a week or more.
What you can do to speed up your mortgage refinance
Some steps in the refinance process are out of your hands. For example, the appraiser and title searcher are third parties neither you nor the lender controls.
However, there are steps you can take to help the refinance process go smoothly and avoid delays.
- Check your credit before you apply for a mortgage refinance. Problems in your credit report, such as late payments and charge-offs, hurt your credit score. Such issues can delay approval or prevent you from receiving a new mortgage, so clean up your credit before applying.
- Fill out the mortgage application completely. Missing and incomplete documents can slow the process, as the underwriter will have to contact you to request the missing material.
- Respond quickly when the underwriter requests more information. Any delays on your end can slow the underwriting process and delay approval.
- Cooperate with the appraiser. The appraiser may contact you to schedule a visit to your property. Schedule the visit as soon as possible so the appraiser can get the information needed for the appraisal. Be sure to declutter your house and provide the appraiser with details about upgrades you’ve made to the house.
Refinance mortgage process FAQs
How soon can you refinance a mortgage after closing?
How soon you can refinance a mortgage after closing depends on the terms of the mortgage. Some types of loans have a waiting period. For example, VA loans require you to wait 210 days after your first mortgage payment is due, and FHA loans require you to wait at least 210 days after the loan closes.
Can you refinance without an appraisal?
You may be able to refinance without an appraisal, depending on the lender and the type of mortgage you apply for. The lender may require an appraisal to make sure the house is worth as much as they are lending you.
Can a mortgage loan be denied after an appraisal?
Yes, if the home appraises for less than the amount of your mortgage, you can be denied a mortgage refinance.
You can also be denied a mortgage after an appraisal for reasons that have nothing to do with the home’s valuation. For example, if the underwriter finds you’ve taken on significant debt and your debt-to-income ratio is no longer within the lender’s requirements, you could be denied a loan at that stage of the mortgage refinance process.
Can I get my own appraisal for a refinance?
The lender will order an appraisal, and you cannot select the appraiser. However, if the appraisal comes in lower than expected, you can ask the lender to have a second appraisal performed. If the lender won’t order another appraisal, you can hire an appraiser to do a new appraisal. You can then submit the report and ask the lender to reconsider the home’s valuation.
Trying to decide if you should refinance? Talk to a local Finance of America Mortgage Advisor to learn more about your options.