The Refinance Process, Step by Step
- Check your current rate and equity — refinancing only makes sense if the new rate, term, or cash-out amount improves your position.
- Shop multiple lenders — get Loan Estimates from at least three lenders within a 14-45 day window so the rate shopping doesn't hurt your credit score.
- Lock your rate — once you choose a lender, you can typically lock the quoted rate for 30-60 days while the loan processes.
- Home appraisal — the lender orders an appraisal to confirm the home's current value supports the new loan amount.
- Underwriting — the lender verifies income, assets, credit, and the appraisal before final approval.
- Closing — you sign the new loan documents; for most refinances (not purchases), a 3-day right of rescission applies before funds disburse.
What Lenders Look At
Refinance underwriting checks the same core factors as a purchase mortgage: credit score (most conventional refinances want 620+), debt-to-income ratio (ideally under 43%), and loan-to-value ratio based on the appraised home value. A cash-out refinance typically requires more equity remaining after the new loan — usually at least 20% for conventional loans.
Rate-and-Term vs. Cash-Out
A rate-and-term refinance simply replaces your loan with a new one at better terms, without changing the balance meaningfully. A cash-out refinance borrows more than you currently owe and gives you the difference in cash — useful for debt consolidation or home improvements, but it resets your equity position and usually carries a slightly higher rate.
Timeline Expectations
Most refinances close in 30-45 days, though lenders like Rocket Mortgage advertise closings as fast as 21 days for straightforward files. Appraisal scheduling and underwriting backlogs are the most common sources of delay.
This page is for educational purposes and isn't personalized financial or lending advice. Rates, terms, and lender offers change frequently — confirm current figures directly with lenders before acting.