Refinancing your mortgage involves fewer people than when you first bought your home, but it still takes a village to accomplish the task.
You’ll likely meet just a couple of these people face to face when you refinance your mortgage. Most of the back-and-forth happens with your first point of contact — your loan officer — by email or phone.
1. Loan officer
The loan officer is the face of the refinance transaction, says Alex Margulis, vice president of residential lending at Perl Mortgage in Chicago. This person will explain the loan process upfront, negotiate the terms of the loan and act as your main point of contact throughout the process.
Your loan officer will collect all of the documents needed to get the application started, including W2s, pay stubs and a copy of your most recent mortgage statement.
Aimee Renkes, a senior loan officer with Midwest Lending Corp. in Chicago, says your loan officer will also help you determine if refinancing makes sense for you.
“Your loan officer should be your go-to if you have any questions or concerns at any point in the process,” she says. “That’s why you want to make sure you’re working with a loan officer you’re comfortable with, and who’s experienced and is going to take care of you.”
2. Loan processor
Once your loan officer gets the ball rolling, she’ll pass along your refinance application to the loan processor.
Karli Spahr, a sales manager with New Penn Financial in Minneapolis, says the loan processor gathers things like verification of employment, verification of deposit and title work. This person packages all this information and sends it to the underwriter for review.
Like the loan processor, the underwriter works behind the scenes and never interacts directly with you. This person is like the “enforcer,” Spahr says. He validates your documents, making sure that everything meets the guidelines of the loan that you’re applying for. The underwriter is the person who gives final approval to your application.
The appraiser is assigned by the lender through a third-party appraisal management company. This usually happens during underwriting.
If all your interactions with your loan officer have been through email or phone up to this point, the appraiser is the first person whom you’ll meet face to face.
Matt Gougé, a senior loan officer with Mountain West Financial in Sacramento, California, says the appraiser will reach out to you directly and arrange a time to come to your home. He or she will evaluate the condition of your home and grab comparable sales from the area, then report to the lender.
5. Title company representative or notary
Early in the refinance process, the title company gives the lender all of its fees for the initial disclosure, Gougé says. The title company runs a preliminary title report to make sure your home is free of liens and other title issues, and often holds the escrow account that funds your final loan. Your lender is in contact with the title company until the very end, making sure everyone is clear on fees before your loan officer sends you the final disclosure.
The title company conducts the closing process. Depending on what state you live in, you’ll meet either a title company representative or a notary face to face, either at the title company’s office or a location of your choosing. An attorney might also be present, again depending on where you live. The title company will send all the signed documents back to your lender.
You have three days after signing to change your mind — this period is known as a right of rescission. If you’re still on board after those three days, a funder at the lending company authorizes your new loan and sends it to the title company. The title company then pays off the existing loan.
How you can help the refinance process run smoothly and quickly
Most lenders give a time frame of 30 to 40 days to complete a mortgage refinance. Depending on the volume of applications a lender is handling, it may take a bit longer. Here are some things you can do to help the process run as smoothly and quickly as possible:
- Send your loan officer the information she requests in a timely manner.
- Don’t make any big purchases, like a new car.
- Don’t take out a new line of credit.
- Don’t leave your current job.
Michael Burge is a staff writer at NerdWallet, a personal finance website. Email: [email protected].