Mortgage Refinance Closing Process: What To Expect

Many homeowners refinance their mortgages to achieve a better interest rate. In some cases, they may require access to quick cash. No matter what the reason may be, refinancing is a great way to save money in the long run. Though refinancing a mortgage is not as complicated as buying a home, the decision to refinance is a significant financial commitment. Obtaining lender approval, comparing interest rates, and acquiring a home appraisal can be daunting, even for experienced buyers. Understanding the closing process can save you time, money, and stress. 

What To Bring to a Refinance Closing

Once you’ve obtained a favorable interest rate and the lender approves your loan, the last step is closing. Before closing, homeowners should be prepared to provide a significant amount of required documents before they can effectively close on the new loan. A Closing Disclosure will be sent to you three days before your closing date. This document details your new loan terms, projected payment schedule, closing costs, and any additional closes. It is vital to carefully review this paperwork before closing to ensure that there are no major variations from the costs your lender initially provided in the loan estimate. If you notice any discrepancies, ask your lender for clarification well in advance of your closing date. 

The closing process for a mortgage refinance is similar to closing on a new home. A refinance closing requires that you meet with your lender, bring essential documentation, and sign paperwork to finalize the refinancing process. Required documentation includes the following:

• State-issued photo ID: A driver’s license or other government-issued ID will suffice. 

• Cashier check or wire transfer: To pay for closing costs or outstanding fees not included in the loan terms

You’ll be asked to read and sign several documents at the appointment, including declarations and affidavits. These documents are legally binding, so take your time reviewing them to ensure they’re accurate. 

Who Will Be at the Refinance Closing?

Most refinance closings will occur at the title company, where you, any co-borrowers, and a closing agent will finalize the documentation. Any party on the loan must be present, along with an employee of the title company. Depending on your state, a witness may also be required. Double-check with your closing agent to ensure you have the correct address and appointment time. If you have questions about who will attend, you can ask your closing agent before arriving at the title office. 

How Long Does Closing for a Mortgage Refinance Take?

There is no exact time limit for how long a mortgage refinance can take. Many factors can influence your application and ultimately affect the timeline. These variables include the complexity of the applicant's financial situation, the amount of paperwork, and the current economic climate. Inflation rates can impact the mortgage refinancing process. Generally, you can expect to close within six weeks of your refinancing application. 

How Much Are Closing Costs on a Mortgage Refinance?

Closing costs vary greatly depending on where you live and the size of your loan. On average, most homeowners will pay closing costs of between 2% and 5% of their loan amount. For an estimate of your closing costs, use this closing cost calculator. If closing costs are a financial barrier to refinancing your mortgage, consider a higher interest rate or rolling the closing costs into the loan. 

How Long Does It Take to Sign the Refinance Papers?

You’ll receive a settlement or closing date to sign the refinance papers. Closing on a refinance is much simpler than buying a home for the first time. Most closing appointments take less than an hour to complete the closing process. 

How Long Does It Take to Receive Funding After Closing on a Mortgage Refinance?

After you sign the closing paperwork, there’s a three-day grace period mandated by The Truth in Lending Act. This grace period protects applicants and allows you to withdraw from the refinance or request a change. If you are not comfortable with the new loan or if circumstances change, you will have three days to nullify or commit. 

How To Find a Mortgage Refinance Lender

If you’re ready to consult with a top mortgage refinance company in your area, here is our list of the best mortgage refinance companies near you.