How long does it take to refinance a house?

If you're thinking about refinancing your home, you may be wondering how long everything takes. The time frame can vary depending on the homeowner's circumstances, the lender's timeline, and other factors.

Here's the process with Discover® Home Loans. DHL loans typically go from application to funding in an average of 5-7 weeks. Applying is simple from start to finish:

1. Getting the basics (around 1-2 weeks): Apply online or over the phone to review your loan options, then upload the required documents. We'll confirm your initial eligibility.
2. Processing your info (around 4 weeks): We'll gather third-party information about your home and then send your complete application to underwriting for a final decision.
3. Closing your loan (around 1-2 weeks): We'll contact you to schedule your closing and then arrange for your loan funds to be sent to your accounts.

What are the stages of refinancing?

Here are the typical stages involved in a mortgage refinance:

Preparing for the application

Be sure to look at a lender's eligibility criteria before applying for a mortgage refinance. This may help you assess whether the lender is likely to approve your application or not. 

You may also want to check your credit score before applying. This is a three-digit number representing your credit behaviour and risk that lenders use to determine how likely you are to make payments on time. A higher score may make you eligible for a lower interest rate.

If your credit score doesn't meet your lender's requirements, you may be able to increase it. Doing things like paying bills on time and paying down outstanding balances may boost your score. 

It's a good idea to get familiar with common mortgage terminology before you apply for a mortgage refinance. Understanding key terms may make the process easier.

Application

A mortgage refinance application can often be completed online or over the phone. Your lender will typically ask for important documents to submit with your application, such as:

• Pay stubs
• Tax forms (W-2s, 1099s)
• Bank statements
• Evidence of assets/investments

If your lender allows it, uploading documents online rather than sending them in the mail may speed up your application.

During this stage, your lender may offer you a mortgage rate lock, which (subject to certain conditions) guarantees a specific interest rate for a set period of time, usually until loan closing. This may be something you want to consider. 

Rate lock

If you’re refinancing to secure a lower interest rate, consider an interest rate lock as part of your application process. A rate lock guarantees a rate for a set period of time, typically from application to closing. 

Underwriting

Underwriting is when the lender decides whether to approve your application for a mortgage refinance. They typically examine your credit history, financial documents, and other information to determine if you meet their criteria. 

You may be able to accelerate this process by quickly providing your lender with any additional paperwork they ask for.

Home appraisal

Your lender may request an appraisal to determine the current market value of your home. The outcome of the appraisal will be delivered in a report.

If your lender requires a full appraisal, an independent appraiser will visit your home and examine its interior and exterior. Here are a few things you can do before the appraiser arrives:

• Clean up: Finish all the projects on your to-do list and get your home in tip-top shape. Start outside by mowing your lawn, raking leaves, and cleaning windows and gutters. Then, make the inside of your house look clean and inviting. Remove clutter, fix anything that's broken, vacuum floors and carpets, and touch up old paint. 
• Collect information about upgrades: If you've made any upgrades to your home that could potentially increase its value, make sure you gather receipts, contractor invoices, and other documents so you can show them to the appraiser. 
• Do your own research: Research the value of homes in your area and look at comparable properties to see how sales are trending. You can share this information with the appraiser.

Closing

Closing is the final step in the mortgage refinance process, during which you sign all the loan documents and pay any closing costs. Your lender then usually releases loan funds to pay off your old mortgage balance, and you'll start making payments toward your new loan.

Delays during a mortgage refinance

Various things may delay a mortgage refinance, including:

• Taking on new credit: Try to avoid opening a new credit card or taking out a new loan before or during refinancing. Lenders may look at your credit report more than once when reviewing your application and ask questions about any new credit. This may slow things down.
• Incomplete/incorrect paperwork: Sending incomplete or wrong paperwork may cause delays in the refinancing process.
• Service provider timelines: The availability of appraisers and other third-party service providers may impact how long it takes to refinance a mortgage.