Mortgages take more time today than they did just a few years ago. Some of the recent rules and regulations inject delays into the process, and all lenders are more careful today to be sure every single document in the loan package is just what it should be.
So, what is happening after you apply that adds time into the refinance process?
After you complete your loan application, many other people spring into action behind the scenes.
The title company will open an escrow file and begin inspecting the title of your property. An appraiser will make an appointment to view your property and take photos in preparation for your appraisal. Appraisers deliver their reports in about a week—sometimes more or less, depending on their workload.
Once the underwriter has reviewed your file, you will get a conditional loan approval. The “conditional” aspect of the approval means that there may be some other documents to provide. There may be routine questions about the appraisal, for example; or the underwriter may ask for clarification about notations on your paystub.
When the underwriter has signed off all the conditions, we will send you the Closing Disclosure (CD). This document shows all the final numbers for your loan. Once you have received the CD, you must wait three business days before you can sign loan documents.
You’ll sign your loan package with a notary, who will acknowledge your signature. Then, if you are refinancing your residence (rather than an investment property), you’ll have to wait three business days more (“rescission period”) before the loan can close escrow.
If you sign loan documents on Thursday, for example, the rescission runs from Friday to Monday at midnight (Saturdays count, Sundays and Holidays don’t) and the loan would fund on Tuesday.
Your Next Steps
Although we’ve addressed what happens behind the scenes once you’ve applied for a refinance, there are many other factors, tips, and tricks you can learn about the process.
Find out more by downloading our ebook How to Refinance Before Mortgage Rates Go Up.