How Long Does It Take To Close On A Refinance After Appraisal?

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For borrowers in Chicago seeking to refinance their mortgage loan, a common question that arises is “how long after the appraisal will it take until I can close on the refi?

How Long Does It Take To Close On A Refinance After Appraisal?

While timelines vary, typically allow 2-4 weeks from the date of appraisal until your refinance closing appointment. 

How Long After An Appraisal Does It Take To Close On A Refinance? 2 - 4 weeks

Factors impacting Refi closing time after Appraisal

Similar to purchase, the appraisal is critical for lenders to assess current fair market value and determine the amount able to be refinanced based on equity. The appraiser’s valuation must support the requested loan amount before final approval.

Appraisal Review Process

Once the appraisal report is submitted, lenders need 5-10 days to thoroughly review it, assess the value determination, and resolve any concerns with the appraiser. 

FHA and VA loans may require further review depending on program guidelines.

Underwriting and Loan Approval

The appraised value must be incorporated into the lender’s underwriting approval process before issuing a clear-to-close notice. 

Underwriting refi loans normally takes 1-2 weeks from a fully completed appraisal. Any appraisal issues can delay approval.

Closing Disclosure Preparation

Per RESPA regulations, the lender issues a closing disclosure to the borrower at least 3 days before the closing date

The title company also needs 3-5 days to review the file and prepare closing documents.  

Scheduling Closing Date

The actual closing date depends partly on availability of the borrower, settlement agent, and lender representatives. With parties’ schedules, expect at least 1-2 weeks lead time to schedule your closing.

Reasons for Delays

If the appraisal uncovers issues impacting value, it may warrant re-negotiation of the loan amount or lender requests for further documentation from the borrower. 

An appraisal coming in lower than expected is an example situation resulting in delays.

Streamlining the Process

Borrowers can expedite the waiting period after the appraisal

  • By applying with lenders offering accelerated underwriting,
  • Getting pre-approved to bypass documenting income/assets, or
  • Opting for limited appraisal waivers if eligible.

But in most refinances here in Chicago, borrowers can reasonably expect their transaction to close around 2-4 weeks after the appraiser visits the property. 

The lender must conduct due diligence on the valuation while also preparing loan documents.

It’s wise for borrowers to build in some cushion within this average timeline in case hiccups arise. Patience and understanding of the appraisal review process will pay off down the road for a smooth closing. 

Learn how long does it take to close on a house in Chicago, Illinois.

Let me know if you have any other refinance questions!

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