Sponsored Content: Refinancing can help you take advantage of lower interest rates and decrease monthly payments on your home loan. But it involves creating a new mortgage to replace your existing one, so you’ll go through the document collection, appraisal, underwriting/approval, and closing processes again.
Before deciding whether to get a mortgage refinance from Discover® or another lender, it’s important to understand how long the process takes.
How long does mortgage refinancing take?
The amount of time it takes to refinance a mortgage depends on many factors, like how long it takes you to submit documents and how long it takes your lender to complete the underwriting process.
How to refinance your mortgage
1. Choose a lender
Research lenders to compare available rates and loan terms. Look out for each lender’s fees (like credit report fees and underwriting fees), and whether they offer credits or discount points to help lower costs.
2. Submit documents for approval
Lenders will request access to certain financial documents and information, like:
- Credit score
- Current mortgage
- Monthly debts
- W2s and 1099s
- Proof of assets
- Tax returns
- Credit card and bank statements
Once you submit these documents, lenders will use them to approve your loan and offer certain terms and rates.
3. Set your terms
Upon approval, you can work with your lender to choose the best loan terms for your financial needs.
For example, consider your:
- Interest rate
- Monthly mortgage payments
- Repayment term
- Amount of cash out, if applicable
- Credits and discount points
- Closing costs
4. Conduct an appraisal
Your lender may require an appraisal to gauge the current value and equity in your home. Borrowers commonly cover the cost of the appraisal upfront, though some lenders like Discover Home Loans may waive this fee (unless you pay off your loan within three years of initial funding) or roll it into your monthly payments.
5. Close on the loan
When you close on the new mortgage, your old mortgage will be paid off, and your refinanced mortgage will be financing your home. At this time, you also may have to pay closing costs, like loan origination, processing, and insurance fees.
The bottom line
Although mortgage refinancing can take some time, the process can offer many potential benefits to homeowners. Just make sure that you understand the process beforehand, so you make the best choices for your financial goals.
Name: Michael Bertini
Job Title: Consultant