If you are a homeowner who is looking at current interest rates and considering refinancing, you’ll want to ensure that you don’t miss the opportunity to lock in at a lower rate. Therefore, you will want to know how long mortgage refinancing takes. You cannot make an informed refinancing decision until you understand the process and time involved. This will grant you the ability to plan financially for your refinance.
Refinancing can take anywhere from two weeks to one month, but this could be extended depending on when you can get your home appraised and gather all the necessary documents.
We want to ensure that the process goes smoothly for you. Therefore, we want to help you understand each step from both the borrower’s and lender’s perspectives.
Hiring a Broker
Since you’ll be refinancing you’ll want to hire an mortgage broker with a network of lenders. Your broker will be able to recommend lenders that are suitable for your specific situation. But first, you’ll need to sit down with your mortgage professional to discuss your terms of engagement during the refinance process before you can begin the actual process itself.
Submitting Your Documents
If you are already prepared and have all of your documents in order, the process of refinancing your mortgage can be quite quick. This includes:
- Existing mortgage details
- Identification
- Income tax returns
- Proof of income and job stability
- Credit report and credit score
Once these documents are submitted, your broker will order a title search on the property to ensure that there are no pending liens against it.
Your Home Appraisal
Even when you’re are refinancing, you’ll need to get another home appraisal done. This is a very important part of the process. Any delay in scheduling and completing the appraisal could delay the timeframe of your approval. If you’re working with a mortgage broker, they can refer you to a local appraiser, so that you can avoid any delays.
Underwriting
The next step is underwriting. This is where an underwriter performs an assessment of your finances and home equity, then compares it to your requested loan amount. They will also assess in your banking statements, credit history and income during your risk-level assessment.They will then deem you as either a high-risk or low-risk borrower. If you have a fairly good credit score, then the underwriting process should go very smoothly and quickly.
Once you have completed these four steps, your lender will close your loan, at which time they’ll disburse your loan to pre-pay your already existing mortgage. However, if you are unsatisfied with your refinancing terms, and plan to see if you can negotiate with your current lender, this will also cause a delay in the timeframe for the refinancing process.
The length of time it takes to refinance, depends on you, your financial position, but your broker or lender can provide you with an estimated timeframe, and advise on how to avoid any delays. Contact AKAL Mortgages to speak to a broker today.
5 Reasons to Refinance Your Mortgage
Mortgage refinancing is when you break your current mortgage in order to get a new one. Now you may be wondering why anyone would do this. But the fact of the matter is that there are many good reasons why a homeowner might want to refinance their mortgage.
And here are 5 of those reasons:
- Lower your interest rate
If interest rates on mortgages have gone down since you entered your current contract – or if you are eligible for a better interest rate because you’ve improved your credit – then refinancing can be a great way to save money on interest. Remember even a small difference can mean thousands of dollars in savings over your amortization period.
- To finance home renovations
Are you planning a major home renovation in the coming months? Refinancing your mortgage is one way to access your home equity in order to pay for these renovations. If you need to borrow money for your home upgrades, this is a much better and lower-cost option than other forms of borrowing such as credit cards.
- To buy an investment property
The value of homes has skyrocketed in recent years and those who have invested in real estate are doing very well. That being said, you still need to get a down payment from somewhere and refinancing your mortgage is one way you can get the money you need to invest in an income property.
- To consolidate your debts
If you have high interest consumer debts, then consolidating those debts is one of the best strategies for lowering your interest payments and ultimately getting out of debt faster. If you have enough equity in your home, refinancing your mortgage can be an inexpensive way of consolidating your debts.
- To change lenders
If you are unhappy with your current mortgage lender for some reason – or if you are simply now eligible for a traditional mortgage at a lower interest rate than you were before – mortgage refinancing is really the only way you can change lenders before your current mortgage term ends.
Is Mortgage Refinancing right for me?
Mortgage refinancing can be a great solution for any of the reasons listed above but because it requires breaking your current mortgage, there is a financial penalty associated with it. To determine if the cost is worth it, you should speak with your mortgage broker to run the necessary calculations.
Contact AKAL Mortgages today
To learn more about a mortgage refinancing and if it’s right for you, contact AKAL Mortgages today.
When we say YES! We stand behind our promise.