Refinancing takes time. In fact, it can take anywhere from one to two months depending upon your lender and depending upon your own diligence in getting your paperwork submitted and in answering questions immediately.
Given the fact that interest rates are rising you might wonder why anybody would refinance.
There are a few reasons. First, some people still have high interest rates from years ago. They didn’t refinance when rates were really low, perhaps because of a financial problem, but now they can qualify, and they want to lower their rate. Or, perhaps they want to pull some equity out of their house. Still others would like to stretch out their payments a little longer.
Whatever the reason, if you want to refinance, there are a few things you can do to ensure a smoother transaction.
First research your options. Talk with your current lenders and let them know that you’re thinking of refinancing. They may offer you an attractive interest rate and perhaps a break on the closing cost, just to keep your business. Then do check with other lenders. Let them know that you’re shopping for the best rates, and you will refinance with the lender who offers you the lowest price both in interest rates and closing costs.
Because interest rates fluctuate from day to day, once you’ve narrowed your choices, check rates with each lender on the same day.
If time is of the essence for you, ask each lender how long it might take to complete your refinance. The fact is that some lenders put refinances at the bottom of the pile because purchase transactions have deadlines. They need to get those done first.
Next get your documents gathered and fill out your loan application completely. If you leave blank spots the lender will send it back to you to complete, so get it all done right the first time. Talk to the loan officer in advance so you know exactly what documentation you’re going to need to submit with that application.
It should include at least your proof of income, copies of your bank account and investment account statements, and the last two years of your tax returns. Be sure the documents have been generated within the last month. You’ll also need a copy of your homeowners insurance and possibly a copy of your deed of trust and a property survey. Again, your lender can advise you on the paperwork you need to submit.
It’s likely that your lender will have questions or need documents that you haven’t supplied, so respond quickly to any Email, text, or phone call from your lender. if you delay, your refinance will be delayed.
Once you’ve submitted your completed loan application and all your documentation, your lender will be required to supply you with a loan estimate and loan disclosures within 3 days. Read the estimate carefully to ensure that the interest rate, closing costs, and other details are the same as those that were quoted verbally. The estimate should include your monthly payment information, your interest rate, your closing costs, and, unless closing costs are wrapped into your new loan, how much you will need to bring to closing.
Be sure you know exactly what costs you will be required to pay at closing. The last thing you want at this point is to come up short and be scrambling for funds the day of closing.
Assuming that you are satisfied with the lender’s interest rate and costs, and that the lender has conditionally approved your loan, the next step is the appraisal. You need to be on hand to let the appraiser into the house, so plan ahead to be at home that day. Be sure that your lender knows how to contact you during the day in case the appraiser wants to make a same-day appointment.
Underwriting is the final step before closing, and it can be the most time-consuming step. On average it takes from 5 to 8 days. In some cases, it can take much longer, especially if the underwriter calls for more information from you. In addition, underwriting on a refinance often takes longer than underwriting on a purchase. This is simply because purchase transactions have deadlines. When they’re busy, your transaction might go to the bottom of the pile.
Don’t be shy.
If you don’t hear from your lender within a reasonable amount of time, reach out. Let your lender know that you’re there and waiting and ready to close. Sometimes you really do need to be that squeaky wheel.
Whatever you need, we’re here for you.
Whether you’re buying a new home or refinancing your current home, we at Homewood Mortgage, the Mike Clover Group, are here to serve you with fast friendly service.
Call us today at 800-223-7409.
