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Many homeowners are looking at mortgage rates today (some 15-year refi rates are close to 2% and some 30-year rates are below 3%) and thinking: hmm, is it time for me to refinance? But many are hesitant: About three in four homeowners with a mortgage they had since before the pandemic began have not refinanced. Of those, 23% say the reason they haven’t refinanced yet is because there is too much paperwork and hassle, an August Bankrate survey found. And while it is true that there is a lot of paperwork to be done, the good news is this: recently, getting a refi is taking a lot less time.
The average time to close for a refinance has risen to 47 days, from 48 in June, 55 in April and 59 in January, according to the most recent report from data firm Origination Insight of ICE Mortgage Technology.
What’s the fastest refinance I can refinance?
Ideally, lenders can close a mortgage refinance within two to three weeks if the loan application and approval goes smoothly, says Greg McBride, chief financial analyst at Bankrate. This can happen when you don’t get a full valuation, either because they use an automated valuation model or because there is a waiver of valuation on the part of the investor. “The income and employment audit should also go smoothly,” says McBride.
Granted, it’s not uncommon for a refinance to take seven or eight weeks to complete, says Holden Lewis, real estate and mortgage expert at NerdWallet. And there are times when the process can take even longer. “Typically, any loan that requires a home appraisal will take longer as home appraisers are inundated with a high volume of purchase appraisal and refinancing requests while mortgage rates remain at historically low levels.” says Denny Ceizyk, senior writer at LendingTree. And Lewis says, “Add a week of price comparison at the start and in total the process will take about two months.” (Compare the best rates you can see here.)
How can I make sure my refinancing goes faster?
“Have pay stubs, employment contact information, W2 forms, bank statements, mortgage statements, home insurance information and property tax information before you complete your loan application. Many lenders offer online portals to download PDF documents or may even have the ability to electronically access your income and assets to speed things up, ”says Ceizyk.
Beyond that, respond quickly to requests for updated documentation. “These requests can be frustrating and seemingly insane, but remember that you are dealing with a business and businesses are dumb,” says Lewis. If the lender wants a copy of your last pay stub, or if they’ve lost permission to see your taxes, don’t take it personally. “You just have to deal with it, provide the documents and move on,” says Lewis.
Alternatively, choosing a refinance that does not require an appraisal can speed up the refinancing process. “Conventional, FHA, VA and USDA guidelines allow refinancing without appraisal requirements. Ask your loan officer if you qualify for any of the appraisal exemption refinancing options, this can shorten your refinancing schedule by several weeks, ”explains Ceizyk.
And knowing how much you want to borrow and sticking to that number can also help the process go faster. Ceizyk says, “Lenders are required to post new information whenever you change your loan amount, so do your best to secure your loan amount before the process is complete, otherwise it could delay your closing.
Ultimately, to make sure a mortgage refinance doesn’t drag on, Jacob Channel, Senior Economist at LendingTree, says, “By being well organized and knowing what lenders want as well as what kind of documents. they are likely to ask, refinancers can avoid being delayed during the process.