For most refinance transaction the time frame is thirty days from the day the Loan Officer has your application and requested documentation. In some instances a homeowner is able to close in 21 days (or less). If there is a subordination of a second mortgage the time frame could be pushed out to 45 days.
When calling or emailing Loan Officers for rate quotes make sure to include a question about how long it takes to refinance with their company. Not all mortgage lenders are the same; some are fast, some are middle of the road and others are slow.
Steps To Closing Your Refinance In Less Than 30 Days:
Follow these simple steps to close your refinance loan fast:
- Be prepared; gather your refinance documentation before you begin.
- Use an experienced and well respected Loan Officer.
- Fulfill any request for documents within 24 hours of request.
- Sign and date your initial disclosures asap.
- Schedule your inspection within 2-3 days of application.
If you follow those simple steps you should be able to close your refinance application in less than thirty days. And if you don’t need an appraisal or even if you do but it gets done quickly you might be able to close in 21 days or less.
Very Important To The Process:
If you want to close quickly make sure you follow these golden rules:
- Send in exactly (to the “t”) what the Loan Officer is asking for.
- When it comes to documents; send in the complete document. Turn in all pages, front and back of each page even if it’s blank. Lenders require multipage documents (like bank statements ) to be complete.
- Sign all the disclosures as soon as you receive them.
- Any any emails or phones within 12-24 hours.
Sometimes a homeowner will decide to send in something other than what was requested. For example; a Loan Officer will request your two most recent paystubs if you are a W-2 employee. If you send in a paystub from four months ago, and another one from three months ago that’s half torn the Loan Officer is going to have follow up and make another request.
And it’s key to send in all pages on the document; even if it’s a blank page (happens a lot with bank statements).
What Is A Subordination?
In the mortgage industry a subordination is when a homeowner has a first and second mortgage on their home and the homeowner wants to refinance the first mortgage while keeping their second mortgage in place. The second mortgage has to “subordinate” to the new first mortgage.
Don’t Make This Mistake:
If you are thinking of refinancing make sure you avoid this:
- During the process do not apply for new credit
Don’t apply for a new car loan, personal loan, boat loan and don’t apply for a new credit card. In fact don’t apply for anything during the time you apply for your new mortgage until the day it closes (what until the loan records with the county).
If you do apply for a new car that then has to be documented. It could add an additional seven to fourteen days to your time frame depending on how fast the Loan Officer can receive the documentation he or she needs to send to underwriting.
And not only will it dramatically slow the process; it also may cause your Debt-To-Income ratio to move above the lenders limit which means they would then have to turn down your application.
A Loan Officer with five plus years of experience is in a better position to close your loan fast than a Loan Officer with less than five years of experience. Also; an experienced Loan Officer that’s been with a company for at least several years will more likely be able to close your loan fast than an experienced Loan Officer who recently switched companies.
Experience matters especially in the mortgage industry. Having an experienced Loan Officer who is well established at his or her company is golden. He or she will know the ins and outs of getting a refinance closed and that will be a big help in terms of time frame needed to close.
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Banks Can Take Longer:
I know there are many well-known banks that take 45 – 60 days to close a basic refinance loan.
I don’t think anyone including myself can say exactly why the “big” banks take so long but my guess is this; they know their name is well established and people generally go with a name they know so providing a fast turn around time on a refinance and/or super aggressive mortgage rates is not something a “big” bank needs to do.
Also big banks generally pass you from one department to the next during the loan process and that can add significant time to the process. Closing quickly is a combination of two things; the borrower being responsive and the Loan Officer being efficient. One thing banks struggle with is being efficient.
Is There A Catch?:
So is there a catch to a shorter refinance time; like a higher rate or higher fees?
Well, at least not with us. Our mortgage rates and fees are not increased because of shorter refinance times. In fact most clients will find that our rates and fees are better than what you’ll find at a “big” bank and our service is far superior.
How is that? Our overhead is drastically lower than a traditional bank so we can pass that savings along to the client. And since you’ll work directly with me from beginning to end you’ll work with one person who knows your situation and who can respond to all your questions in a timely fashion. This also brings down our cost for doing a loan because we don’t have secretaries and processors; the loan officer handles the entire transaction.