How Long Does it Usually Take to Refinance a House

How long does it usually take to refinance a house on average? This is a question that anyone considering the refinance process asks before pulling the trigger. And today, we’re going to cover everything you need to know before making the decision.

Getting a mortgage refinance is a process. It is important to learn about what goes into a refinance if you want to consider getting one! It’s especially helpful to have a clear understanding about the timeline of a mortgage refinance so that you can plan accordingly.

So, without any further ado, let’s dive into this complex topic. Before we can give you an estimation for how long it takes to refinance your house, we must break down the mortgage refinance process itself.

Understanding the Mortgage Refinance Process

When you get a mortgage refinance, you are replacing the current loan you have with a different one. Your new loan does not have to have the same terms as your original loan. This means that factors like your term length, monthly payment, interest rate, and more could be different after the refinance process. There are multiple reasons that people choose to refinance.

Updated Loan Terms

You can change the loan terms when you get a mortgage refinance. This will allow you the opportunity to update your loan. You can opt for a longer term if you need to better manage your monthly payments or a shorter term if you want to pay off the loan faster.

Change Your Interest Rate

Interest rates are constantly changing. The rates of today may be less than the rates that you had at the signing of your mortgage. That’s okay! You may be able to get a reduced interest rate with a mortgage refinance. This can help you save money overall. You may be able to improve your interest rate if your credit score has gotten better! You can check your credit score for free and this can provide you insight as to whether or not your score changed. A higher score can mean better rates!

Get Cash Out of Your Home

There are different types of mortgage refinances. One refinance option is a cash-out refinance. You can build equity in your home when you make a payment towards your remaining loan balance. Equity is the amount of your home that you actually own. You take a higher loan principal and that leaves the remainder of the cash available to take out with a cash-out refinance. The money from this mortgage refinance can be used towards anything but homeowners typically put the funds towards handling their debt or the cost of home repairs. Or, use it to help offset your monthly payment.

So, How Long Does it Usually Take to Refinance a House?

So, now that you know a bit more about the mortgage refinancing process, it’s time to address the question you came here with today. How long does it take to refinance a house? Keep in mind the estimations we make below are not one-size-fits-all. The exact timeline for you to refinance your existing mortgage will vary depending on a number of factors. However, a home loan refinance usually takes 30 days to 45 days to finish.

Unfortunately, you won’t know how long your refinance will take exactly. There are multiple factors that can affect how long the refinance process will take. Inspections, third parties, appraisals, and more can affect these timelines. The amount of time your refinance could take can also be longer or shorter than the average. Your financial situation and the size of your property also affect how long the refinance process will take.

Since there are numerous factors to take into consideration, all you need to do is be aware! A good rule of thumb is to apply within a month of your closing date. This can improve your chances of getting a better interest rate while still reducing the amount your credit score gets impacted.

How to Prepare for the Refinancing Process

You don’t have to just wonder, “How long does it take to refinance a house?” Instead you can take action! It is extremely helpful to learn how you can prepare for the refinance process. It is important to note that refinancing is a big financial event that will take time in order to manage it properly. When you refinance you have to deal with similar processes as well as closing costs.

Check Your Qualifications

You want to understand why you are choosing to refinance your mortgage. What is your motivation? Do you want to change your loan terms? Get a better interest rate? Get cash out of your home? Is your motivation something else? Regardless, you want to make sure you understand why. From there, you can begin to compare available mortgage refinance lenders. When comparing lenders it is important to understand some factors that will be considered. Some aspects that lenders will take a look at are:

  • Your Credit Score: This is still a loan. That means that lenders want to review your credit to see how you are as a borrower. Typically you will need at least a 620 score. However, some government programs may require less than that with scores as low as 580 being approved.
  • The Amount of Equity You Own: The percentage that you own of your home is important, especially in a cash-out refinance. Mortgage lenders typically do not loan you anything past 80% to 90% of the equity that you own. If you don’t know how much equity you have then you can contact your current lender and request a mortgage statement. They will be able to provide you with the information you need.
  • Your Debt-to-Income (DTI) Ratio: Similar to a well thought out budget plan, your DTI ratio looks at how much of your income is reserved for current bills (debt). In order to calculate your DTI you can divide the amount of your monthly debt by the amount of your monthly income. Lenders usually look for borrowers that have a DTI Ratio of up to 50%.

Have Your Documentation Ready

There is a lot of paperwork that your lender will ask for during a home loan refinance. The lender’s goal is to verify your financial history, income, assets, and current financial standing. They may look at your debt to income ratio, recent bank statements, and will likely pull a credit report. When you have your documentation ready, you can easily continue the process so that you know you did everything you could to make the refinance process take less time. Some common forms of documentation that you may need to provide are:

  • Recent Pay Stubs
  • Recent Tax Documents like a W-2
  • Recent Bank Statements
  • Your I.D.
  • Documentation for Anyone Else on the Loan (like a spouse or a cosigner)

Your lender is entitled to ask you any other questions they need to get an accurate view of you as a borrower. This happens during the underwriting stage of your refinance.

Now It’s Time for the Appraisal

When you refinance your mortgage, your new lender will need to get an appraisal of the home. This allows the lender to confirm that they are not giving you more money than what the home is actually worth. In a perfect world, the results of the appraisal will be more than what you paid for originally. Unfortunately, if your appraisal results are low then you may have to change the amount requested in your home refinance. There are some things you can do to try and improve your chances of a high appraisal value:

  • Research is Key: Take a look at the local housing market. The amount of money that local homes are worth can affect your property value. If you see that the data in the area indicates that property values increased, then you want to have this information readily available for the appraisal.
  • Home Upgrade Documentation: Have you done any home upgrades that permanently increase the value of your home? If so, you want to have that documentation ready. Permits, contracts, and receipts are a great source of proof to show that you upgraded your home. This can provide more insight for the appraiser to account for the home’s value accurately.
  • Improve Your Home’s Curb Appeal: How your home looks can play a significant role in determining its value. Making sure your yard is trimmed, your house is clean, and the overall appearance is tidy can help a lot. Also make sure to be attentive to the appraiser. You can note features of the home as you two enter the property.

Is Now A Good Time To Refinance Your House?

Now that you know how long it takes to refinance a house, you are probably wondering if you should pull the trigger. After all, you don’t want to miss the window and end up losing some of the potential benefits you could enjoy. So, you want to decide if now is the best time for you to submit your mortgage refinance application. There are a few aspects for you to consider when trying to decide if you should do this now or hold off. Keep in mind your motivation for the refinance!

Check the Interest Rates

It is almost a guarantee that you can save money when you refinance if the current interest rates are lower now than they were when you signed your mortgage. You should compare your APR with the current market rates to see if there is a difference. You may also be able to save on rates if your credit score has improved. You can always contact a local real estate agent, home loan expert, or housing professional to discuss your local area’s interest rate trends.

Consider The Timeline For How Long It Takes To Refinance A House

The process for a refinance usually takes 30-45 days but can be more or less depending on the specifics of your mortgage refinance. Make sure to account for this time when figuring out if it is the right option for you. For example, if you are looking at a cash-out refinance because you need money for something ASAP then this may not fulfill your goal.

The Amount of Home Equity You Have

How much home equity do you have? You want to find this out in order to see if you can take a cash-out refinance! You may not be eligible if you haven’t been in your home for long and don’t have enough equity built up yet. If you are trying to get cash out of your home with a refinance then these aspects are important to look at.

When Will You Move?

Mortgage refinances still have closing costs that you need to deal with. The amount of closing costs that you will be responsible for varies by area but it is still a cost you need to account for regardless. If you are only interested in staying in your home for a couple more years then you may want to hold off on a refinance if the math doesn’t add up.

Are There Ways to Speed Up the House Refinance Process?

Now that you know how long it takes to refinance a house, you are probably wondering if you can speed up the process at all.

Unfortunately, all you can control is yourself. When you prepare for a home refinance then you are taking all of the steps that you can to be as fast as possible on your end. You do not have control over how long it will take from other aspects of the refinance like the appraisal, third parties, inspections, paperwork, processing, etc. Just remain patient, and start sooner rather than later so you don’t end up mad at yourself for wasting time!

How Long Does It Usually Take To Refinance A House? Parting Thoughts

So, how long does it take to refinance a house? Typically it will take 30-45 days but it can take longer or shorter depending on your specific refinance. How long it takes to refinance a house will vary from person to person.

There are many reasons that people consider a mortgage refinance from changing their loan terms, getting a better interest rate, getting cash out of their home, and more. Make sure to talk to a real estate professional if you have any questions before submitting your mortgage refinance application. If you decide you are ready for a mortgage refinance then make sure that you take the time to properly prepare your finances, home, and documentation to speed up the process!

We hope this discussion answered your question – how long does it usually take to refinance a house? While you’re at it, take a look at our complete guide on how refinancing a mortgage affects taxes. This is another important consideration before you ultimately pull the trigger to refinance your existing mortgage. When in doubt, always reach out to a qualified tax specialist, mortgage lender, or real estate agent in your area – they’ll guide you through the entire process so you come out on top!


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