How to Speed Up Your Mortgage Refinance

A mortgage refinance makes sense if you’re looking to get a lower mortgage rate and/or lower your current monthly payment. This can increase your disposable income, allowing you to save more and achieve other financial goals.

Since refinancing creates a new mortgage to replace your existing mortgage, the process can take some time. You have to apply for a new loan, wait for your lender to review your credit and income, and you’ll typically need a home appraisal. The entire process can take anywhere from 30 to 45 days, sometimes longer—but it doesn’t have to.

If you’re looking to shorten the process of refinancing, here are a few tips to speed up the process.

1. Don’t Cash Out Your Equity

Depending on the value of your house, a cash-out refinance might be an option. This involves borrowing money from your equity to pay off debt, make home improvements, pay for a child’s education, or take care of other expenses.

This type of refinance will increase your total loan amount, and as a result, typically takes longer to complete compared to a simple “rate-term” refinance. So, if you’re looking to speed up the process, one option is to skip a cash-out, and refinance with the purpose of only changing your interest rate and/or term.

A rate-term refinance will often lower your monthly payment. If you’re able to comfortably make your current payment, a lower payment shouldn’t be an issue either. And since you’re saving money with a rate-term refinance, it’ll be easier for the lender to approve your application—which can speed up the entire process.

On the other hand, if you’re cashing out your equity and increasing your mortgage balance, underwriters must carefully review your income and job history to ensure you’re able to afford the higher payment. Plus, you’ll need an appraisal to determine how much you can borrow. These extra steps can slow down the process.

2. Get a Streamline Refinance

If you have an FHA home loan or a VA home loan, a streamline refinance can also speed the process*. You can’t take out cash with a streamline, but you can reduce your mortgage rate and monthly payment. And because you’re streamlining the loan, there’s typically no income verification, no appraisal and no full credit check. Instead, the lender conducts a mortgage-only credit check to ensure you’ve made your mortgage payments on time. If all goes well, you might be able to refinance in as little as three weeks.

3. Have Your Paperwork Ready

Keep in mind that refinancing involves applying for a new mortgage loan, so you’ll have to submit supporting documentation with your application. To speed up the process, gather the necessary paperwork before you apply. The longer it takes to submit your supporting documentation, the longer it’ll take to close on your loan.

Specific documentation needed will vary depending on your circumstances. But typically, you need to provide your most recent months’ paycheck stubs, your tax return for the past one to two years, bank statements from the past two months, your current mortgage statement, and your current homeowner’s insurance policy.

4. Don’t Change Your Employment Situation

A change in job situation is one of the fastest ways to delay a mortgage refinance. Granted, situations beyond your control can happen (like an unexpected lay off). However, if you do have control over your situation, don’t change jobs or make any changes in your employment status until after closing.

For example, avoid switching from a salaried to a commission job role and hold off on becoming self-employed or switching from an employee to self-employment. A change in circumstances can delay a refinance or prevent refinancing altogether.

5. Quickly Respond to Your Loan Officer’s Request

Even if you submit supporting documentation with your application, your loan officer may ask for additional information. It’s important that you respond to these requests immediately to keep your closing on schedule.

If possible, provide this information within hours of the request, or at the very least, within 24 hours of the request. Every day that you delay submitting documents could potentially delay your loan closing by one day.

Bottom Line

A mortgage refinancing is an excellent way to get a lower interest rate and/or a lower monthly payment. But the process can be lengthy. The good news is that there are plenty of ways to speed up this process. If you’re ready to move forward with a refinance, the loan experts at Blue Spot Home Loans can get you started. Give us a call or fill out the contact form to see how much you can save.

*Cherry Creek Mortgage Company is not endorsed by, nor acting on behalf of or at the direction of the U.S. Department of Housing and Urban Development, Federal Housing Administration, U.S. Department of Agriculture, Veterans Administration or the Federal Government.