How Long Does it Take to Refinance My Home Loan?
Borrowers approved for FHA mortgages at higher interest rates are smart to plan a refinance loan once home loan interest rates have fallen again, but some want to know just how long it will take once the process starts to get out of that higher interest rate.
Refinancing a Home Loan
Refinancing a home loan is similar in some ways to the original purchase loan. You have to shop around for a lender (you do not have to use the same lender you started with), and decide which type of refinance loan option is right for you.
That process can take longer than you realize once you know some options include a simple refinance with no cash back to the borrower, an FHA cash out refinance option, and even an FHA streamline refinance option with no FHA-required credit check or appraisal.
You’ll need to decide whether to pay closing costs out of pocket or finance any allowed closing costs into the new loan.
Applying for an FHA Refinance Loan
When you apply for the loan, the timeline from start to finish may be as short as 30-45 days. But some factors may complicate this timeline.
The appraisal is one. How long does it take to get an appraiser to do the work in your housing market? If there is high demand, your timeline may be extended.
A refinance loan with no cash out may go faster depending on the type of loan. The FHA streamline refinance option has, as mentioned above, no FHA-required appraisal.
If the lender chooses to forgo the appraisal, your loan processing time may be faster (depending on the lender) than a loan that does require an appraisal.
Avoid circumstances that could require your lender to re-consider loan approval, such as major career changes in the middle of the loan approval process, applying for other credit before your loan has closed, or having a major change in your FICO scores before closing day.
Remember, once your loan is approved, the lender may run your credit scores again before closing day. It’s a more common practice than you might think. Don’t give the lender a reason to reconsider loan approval with major changes to your credit, FICO scores, or job.
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