Refinancing your mortgage can be a smart move to lower your interest rate, switch to a more manageable loan term, or tap into your home’s equity. Whether you’re dealing with rising costs from an adjustable-rate mortgage or looking to adjust your loan to better suit your financial goals, the question naturally arises: How long will the process take?
In this article, we’ll break down the typical timeline for refinancing, what to expect at each step, and factors that could speed up—or slow down—the process. If you’re weighing whether now is the right time for a refinance, keep reading for insights to help you decide.
Here’s a quick look into how long refinances typically take:
- Fastest timeline: As little as 10-14 days for streamlined or no-appraisal refinances.
- Average timeline: 30-45 days, depending on lender efficiency and documentation requirements.
- Longest timeline: Up to 60+ days, if there are delays with appraisals, underwriting, or closing.
The refinance timeline
A mortgage refinance can’t be completed in a handful of days. The paperwork, underwriting, title checking, and due diligence involved actually require a few weeks from start to finish.
That’s because your chosen lender will need to look closely at your finances, employment status, current loan, and other crucial factors to determine if you are a creditworthy candidate for refinancing your mortgage loan. Plus, third parties may need to be involved, including a professional appraiser who will likely need to evaluate and appraise your property.
Consequently, prepare to practice patience.
“Refinancing a home loan mortgage usually takes between 30 to 45 days from start to finish. This duration can vary based on criteria like the lender’s efficiency, your financial complexity, and current market conditions,” explains Carl Holman, director of Communication and Content for A&D Mortgage in Hollywood, Florida.
Some lenders can expedite this timeline depending on available resources.
“So long as we can get the appraisal done within a reasonable timeframe – usually within a week – we can typically close a refinance in about three weeks,” Mason Whitehead, branch manager with national lender Churchill Mortgage, notes. “However, in some cases, especially if the appraisal or title work takes longer, it can take four weeks or more before closing.”
Jennifer Murphy, vice president of Mortgage for PenAir Credit Union in Pensacola, Florida, echoes those thoughts.
“Typically, these refinance transactions can be completed within 30 days or less,” she says.
Streamline Refinances
Streamline refinancing options are available for loans backed by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA). These are designed to be quick and hassle-free (hence the “streamline” in the name) and oftentimes don’t require an appraisal, credit check, or income verification. Because of that, streamline refinances can be done in as little as ten to fourteen days.
How Long Does It Take to Get the Cash During a Cash-Out Refinance?
The time it takes to receive cash from a cash-out refinance typically depends on the lender’s process, the complexity of your application, and state-specific waiting periods. Here’s a breakdown:
- After Closing: You’ll usually receive the cash within 3-5 business days after the closing date.
- State-Mandated Waiting Periods: Some states, like Texas, have mandatory waiting periods (often referred to as a “right of rescission”), which can add 3 additional days before the lender can release funds.
- Total Timeline: From application to cash in hand, expect the entire process to take 30-60 days, factoring in loan approval, appraisal, and closing.
Factors That Influence How Long It Takes to Refinance Your Home
The time it takes to refinance your mortgage can vary depending on several factors, including:
- Lender Efficiency: Some lenders process applications faster than others, depending on their resources and workload.
- Complexity of Your Finances: Borrowers with multiple income streams, self-employment, or complex financial situations may require additional documentation and review time.
- Appraisal Requirements: If an appraisal is needed, scheduling and completing the appraisal can add days or even weeks to the timeline.
- Title and Underwriting Reviews: Verifying title ownership and completing the underwriting process can introduce delays if there are discrepancies or additional questions.
- Market Conditions: High demand for refinancing during periods of low interest rates can lead to processing backlogs.
Being well-prepared with documentation and responsive to your lender’s requests can help minimize delays and keep your refinance on track.
The steps involved with a mortgage refi
Wondering exactly why a refi can span four to six weeks, on average? Consider the various steps that must be taken during a refinance:
- Apply for the refinance loan after shopping around among lenders. You should have key documents gathered beforehand, including your current mortgage documents, recent tax returns, W2 forms, and bank statements. “If you have to track down certain documents or wait for responses from the various lenders you asked for rate quotes from, it could take you an extra one to two weeks before you’re even ready to apply for a refi loan,” cautions Martin Orefice, CEO of Rent To Own Atlanta.
- Prepare to communicate with an assigned mortgage loan officer from your chosen lender in person, on the phone, or online. This professional may contact you with questions about your application, documents, or otherwise, and/or request additional substantiation.
- Expect the lender to carefully review your application, check on your financial status, pull your credit, verify employment, check the title, and order an appraisal.
- Have your home professionally appraised.
- Lock in your rate or choose to let it float if you suspect that rates will be going down in the coming weeks.
- Await an underwriting decision, which can take up to three weeks.
- If approved by underwriting, prepare to close after you receive your closing disclosure document. “This phase can take another one to two weeks,” Holman says.
- Officially close on the refi loan by signing all necessary documents at a chosen location.
How to improve your odds of getting approved punctually
Having all of your necessary documents gathered ahead of time can keep the refinance process moving along efficiently. And being responsive if contacted and asked to supply additional information can help your cause, too.
Additionally, avoid applying for any other new loans, lines of credit, or financing before applying or getting the refi approved. Also, continue to pay your bills on time and, preferably, in full. Otherwise, your credit score can drop, and you will appear as a less deserving financial candidate.
“Also, to expedite a mortgage refinance, lock in a favorable interest rate at the right time to avoid market fluctuations, and aim to maintain a good credit score,” advises Holman.
On that latter point, it’s smart to check your credit score prior to submitting a refinance application. You’ll need at least a 620 score to likely qualify for a refi, but scores above 670 are recommended to secure a better rate and terms. Your bank or credit card may provide your credit score for free.
The right time to consider a mortgage refi
Often, borrowers pursue a refinance because their current rate or term is unfavorable. Consider that mortgage rates have hovered in the 6% to 7% range—or even higher—in the past couple of years.
That can equate to increasingly challenging monthly payments. If you’re making less money or struggling to pay your bills due to inflation and higher household costs, that monthly mortgage payment can be a real thorn in your side.
Others opt to refinance because, even if they can’t lower their interest rate significantly, they want to lengthen or shorten their loan’s term to, respectively, create more cash flow or pay off their loan earlier to save thousands otherwise spent on interest over the life of the loan.
Additionally, some homeowners desire extra cash to fund a home improvement project, pay off high-interest debt, or for another goal, which they can accomplish if they choose a cash-out refinance loan. This involves tapping into your home’s equity and pocketing the difference at closing.
“The most common reason for refinancing is lowering your payment, which can be done by decreasing your interest rate or resetting the amortization schedule over a longer span—such as going from, say, a current 20-year loan to a new 30-year loan,”
Ideally, interest rates should drop at least 100 basis points (for example, from 7% to 6%) for a refi to be worth it. That’s because there will be closing costs involved (often 2% to 6% of the loan amount) that you’ll want to recoup via the interest savings.
“If you are shortening the loan term, like moving from a 30-year to a new 15-year mortgage, the interest rate doesn’t have to be that much lower,” continues Whitehead. “But given the current high rate market, it probably makes more sense to stick with your current loan and make accelerated payments regularly so that you can pay it off more quickly instead of refinancing it.”
Is right now a good time for a refinance?
Choosing whether or not to refinance will depend on several factors, including current interest rates, your financial situation, and your long-term goals.
“If rates today are lower than your current mortgage rate and you plan to stay in your home long enough to recoup closing costs (known as “breaking even“), it might be a good time to refinance,” recommends Holman. “In addition, if you want to tap equity or change your loan terms, a refinance could be a good move.”
While interest rates are currently higher than in recent years, refinancing could still make sense in certain situations.
For instance:
- Lowering your monthly payments: If you’re struggling with cash flow, extending your loan term could reduce your monthly mortgage payment, freeing up funds for other priorities.
- Switching from an adjustable-rate mortgage (ARM): If you have an ARM and are worried about future rate increases, refinancing into a fixed-rate loan could provide long-term stability.
- Tapping into equity with a cash-out refinance: Even in a higher-rate environment, refinancing may still be worthwhile if you need cash for major expenses like home improvements, debt consolidation, or other financial goals.
You’ll also want to consider the costs of refinancing and the time it could take to break even. Closing costs, typically 2% to 6% of the loan amount, could outweigh the savings unless you plan to stay in the home long enough to recoup those costs.
Ultimately, the best decision depends on your individual circumstances. Before making a move, consider your goals, current financial position, and how long you plan to stay in the home.
When is it too soon to pursue a refi?
If you’ve recently closed on a mortgage loan, you may not be allowed to refinance until your loan has “seasoned” properly. Loan seasoning refers to the minimum amount of time a lender prefers that you hold a loan before they will consider approving a refinance loan.
“Typically, it’s considered too soon to refinance if you haven’t waited at least six months after closing your original mortgage,” Holman says. “Too early can also be costly due to closing expenses and fees, so you need to ensure that the potential savings outweigh these expenses. If in doubt, ask the lender if they have specific guidelines on how soon you can refinance after closing.”
The bottom line
Whether you are eager to quickly improve cash flow, liquidate home equity, change your loan’s term, or refinance before your variable-rate loan adjusts higher, refinancing a mortgage loan can take more time than you expect.
Exercise patience during this process, and respond promptly to messages and requests from your lender, and expect a few snags in the road just to be on the safe side.
