Refinancing your mortgage is significantly simpler than your original purchase — no real estate agent, no home search, no purchase contract. But it still involves a multi-week process. Here’s what to expect.
Step 1: Determine Your Goal
Before contacting any lender, know what you want:
- Lower payment? (Rate-and-term refinance)
- Access equity? (Cash-out refinance)
- Pay off faster? (Shorter term refinance)
- Get rid of PMI? (Conventional with 20%+ equity)
- Remove someone from the loan? (Requires refinance)
Step 2: Check Your Credit and Equity
Pull your credit report. And estimate your current home value — Zillow is imperfect but gives a rough range. Your current loan statement shows your balance.
Current LTV = Loan balance ÷ Home value
This determines what programs you qualify for.
Step 3: Compare Lender Offers
Contact at least 3 lenders within a 45-day window (all credit pulls count as one inquiry). Request Loan Estimates from each.
Compare: Interest rate, APR, total closing costs, and break-even timeline.
Step 4: Lock Your Rate
Once you’ve chosen a lender and they’ve reviewed your documents, lock your rate. Locks typically run 30–60 days. Longer locks cost slightly more.
Step 5: Application and Document Collection
Submit a formal application with your income documents, asset statements, and existing loan information.
Step 6: Appraisal
Your lender orders an appraisal unless you qualify for an appraisal waiver (common for straightforward rate-and-term refinances with conservative LTV).
Timeline: 5–10 days to schedule and receive the appraisal.
Step 7: Underwriting
Your file goes to an underwriter. They may issue conditions (additional documents, explanations). Respond quickly to avoid delays.
Timeline: 5–15 business days.
Step 8: Clear to Close
You’ll receive a Closing Disclosure at least 3 business days before closing. Review it for accuracy.
Step 9: Sign and Close
You’ll sign documents at a title company, a notary, or increasingly via online notarization. Most refinances require bringing a relatively small amount to closing (or receive a check if rolling costs into the loan).
Step 10: The Rescission Period
On primary residence refinances, there’s a 3-day right of rescission — you have 3 business days to cancel without penalty. Your new loan doesn’t fund until after this period.
Total timeline: Typically 14–45 days from application to funded loan. Rick’s average is on the faster end.