How Long Does It Take to Refinance a House?
It typically takes about six weeks to refinance a mortgage, although there are streamlined refinance options that can wrap up faster. Understanding the factors that can speed up or slow down the refinance process may give you more control over how long it takes to refinance your house.
How long does a refinance take?
The average time to close a refinance loan is 45 days, according to data from ICE Mortgage Technology’s December 2021 Origination Insights Report — the most recent report available. Refinance loans backed by the Federal Housing Administration (FHA) or the U.S. Department of Veterans Affairs (VA) take longer to complete than conventional loans. Here’s how long it took to refinance a house based on the loan program:
|Refinance program||Days to close|
Factors that affect how long a refinance takes
You have some control over certain aspects of how fast your refinance closes. Knowing those factors may get you to the closing table faster or prevent unnecessary delays.
Ways to shorten how long a refinance takes
You can speed up the refinance process if:
Your lender offers electronic income and asset verification. If you work for a large employer and bank with a national bank, your lender may be able to electronically verify both your income and asset balances. That will prevent last-minute holdups for updated statements or pay stubs before your closing.
You qualify for an appraisal waiver. Fannie Mae and Freddie Mac offer appraisal waiver options if you have enough equity and are refinancing to reduce your monthly payment without tapping extra equity.
You’re eligible for a streamlined government-backed refinance loan. If you currently have an FHA, VA or USDA loan, you may be eligible for an FHA streamline, a USDA streamline or a VA interest rate reduction refinance loan (IRRRL). An added bonus: These programs don’t usually require an appraisal or income documentation.
You have your financial paperwork ready. In addition to the same pay stubs, W-2s and bank statements you provided when you bought your home, be sure to dig up your closing papers and a current mortgage statement for the home loan you’re paying off.
You don’t change your mind on why you want to refinance. If you suddenly decide to tap equity halfway through a rate-and-term refinance, your lender will have to revise your approval and most likely order an appraisal. Know exactly what your financial goal is before you apply for a refinance.
Refinance delays beyond your control
Your refinance may take longer if:
Your home appraises for less than you expected. Your loan-to-value (LTV) ratio is a measure of how much of your home’s value you borrow and has a big influence on the interest rate you’re quoted. If your appraisal comes in lower than expected, your closing costs and interest rate could go up, too. However, ask your lender about steps you can take to dispute the value.
Your lender is backlogged with refinance requests. This often happens when rates suddenly drop as homeowners overwhelm lenders with new refinance rate lock requests.
How do you refinance a house?
Once you decide why you want to refinance you’re ready to start the refinance process. There are five basic steps you’ll take.
- Shop around for the best deal. Use a refinance rate comparison tool or gather loan estimates from at least three to five lenders. One caveat: Interest rates change daily, so make sure you collect all your quotes on the same day to make apple-to-apples comparisons.
- Fill out a loan application. The more accurate you are on your application, the less chance there is for delays during the refinance process.
- Provide documents quickly. Look out for calls, emails or texts from your loan officer or loan processor to avoid holdups for financial documents.
- Schedule your appraisal inspection as soon as you can. If your refinance requires an appraisal, make sure your home is cleaned and spruced up ahead of time. The longer you wait for the appraisal, the longer it will take to refinance your home.
- Plan ahead for your closing. Decide if you want to roll your closing costs into your loan or pay them out of pocket before completing your loan application. Last-minute loan amount or program changes may result in an extra day or two wait while the lender revises the figures. Review your closing disclosure to make sure the numbers are right, and then close on your refinance.
Frequently asked questions
How long does it take to sign refinance papers?
Some lenders offer eClosing options, which can take a matter of minutes. However, it’s best to set aside an hour or so to review the documents and ask any questions.
How long does funding take after closing refinance?
If you’re refinancing your primary home, your loan will be funded after your three-day “rescission period” ends. Federal law requires lenders to give you three extra business days after signing to cancel. Once that period ends, your refinance loan is funded. There is no rescission period for a second home or investment property refinance.
What credit score is needed to refinance a house?
Although the FHA loan program allows you to refinance with a credit score as low as 500, the majority of borrowers who closed a refinance mortgage during the last month of 2021 had a FICO score of 750 or higher. The table below shows the percentage of total refinance loans closed in December 2021 by credit score range.*
|Credit score range||Percentage of closed refinance loans|
*Based on data from ICE Mortgage Technology’s December 2021 Origination Insights report.