How Long Does it Take to Refinance a House?

BY The Lenders Network

How Long Does it Take to Refinance a House

3 minute read

So how long does it take to refinance a house?

It could be done in less than 30 days, or it could take as long as 90 days.

The truth it, it really just depends on several different factors.

RATE SEARCH: Check Current Refinance Rates

Average Time it Takes to Refinance

According to Ellie Mae’s latest Origination Insight Report the average time it takes to complete a refinance is 48 days. The average time it takes to close a new purchase loan is 51 days.

There are many examples of homeowners who completed their refinance loan in as little as 30 days. There are also examples of homeowners who had to wait 60 days or longer for their refinance to be complete.

Delays are more common when refinancing, maybe because there is not the same rush and pressure to close on time from a seller. You’re already in the home so if it takes a few more days, or weeks to complete the transaction it’s not a huge deal.

How to Speed Up the Process

Inefficient loan officers is one of the most common reasons the refinance process can be slowed down. Asking for one document one day and another document another, instead of getting all documents prepared correctly before submitting it to underwriting.

You can help speed up the process by having all of your mortgage documents ready and organized for your lender at the same time you complete your loan application.

Refinance Document Checklist

  • 2 years of w2’s
  • Pay stubs
  • 2 months of Bank Statements
  • Previous 2 years tax returns
  • Profit and loss statement if self-employed
  • Proof of any other income
  • Bankruptcy paperwork (if applies)

Getting the Best Refinance Rates

In order to get the lowest mortgage rate you will need to have the highest credit score possible. If you have some work to do on your credit then delaying your refinance may benefit you. By delaying the process you will have more time to work on increasing your credit score.

Some of the most common ways of improving a credit score is by paying down your credit card balances. The amount of available credit you are using is called your credit utilization ratio, which makes up 30% of your overall FICO score.

You should also check rates with multiple lenders. Getting rate quotes from 3-4 different lenders is recommended to ensure you’re getting a competitive rate and are not paying too much in closing costs.

Compare Refinance Rates

Getting the Best Deal

  • Pay down credit card balances below 15% of their credit limits
  • Do not apply for new credit or loans
  • Make all bill payments on time
  • Shop and compare loan offers from multiple lenders

Reasons to Refinance

While the most common reason homeowners are looking at refinancing their mortgage is to get a lower rate, there are many other reasons to refinance your mortgage. You may be able to drop private mortgage insurance (PMI) by refinancing which can save you hundreds of dollars off your monthly payment.

Because most FHA loans require mortgage insurance for the life of the loan. if you have an FHA loan you will need to refinance into a conventional loan to drop PMI.

  • Lower interest rate
  • Drop mortgage insurance
  • Refinance adjustable-rate mortgage into a fixed-rate
  • Pay off your mortgage faster with a 15 year mortgage
  • Get cash out with a home equity loan or cash-out refinance