You may be in a hurry to close the refinancing of your home, but the procedure requires the completion of some steps, such as the appraisal. And this requires a prudent analysis time.
So, how long after appraisal to close refinance?
The question has become a reason for study and research. And to clarify the doubts, you have about it, you must continue with us and look at the following article.
But first, what is an appraisal?
It is the evaluation made by a professional of the value of a house or property. It is a necessary procedure that allows lenders to know if the amount requested matches the home’s actual value.
The appraisal provides a level of certainty and security to the lender. If, at some point, the borrower can no longer afford the mortgage loan, somehow, the sale of the property will be able to cover the debt or part of it.
Now, how long after the appraisal is to close the financing?
The process can take anywhere from 30 to 45 days. But if there is a problem with the assessment or other factors related to the transaction, it could take 60 days or more.
If you are thinking of carrying out this type of procedure, you must assume that it will not be as fast as you wish. That is why you should be very patient.
Beyond the appraisal result, the financiers will have to execute an additional step to reduce the risks: The inspection of the property. The intention is to know the current state of the property to close the deal definitively.
But if you wonder how long after appraisal to close FHA refinance, the answer is also clear. Since it is a government loan, the appraisal process requires considerable time.
The objective is to verify that the house meets the requirements established by the government. But also that it is legally suitable to approve a mortgage loan for its final purchase.
What elements affect the terms for a refinance?
Now that you know how long after appraisal to close conventional refinance, we want to answer which elements affect the terms to get this benefit.
1.- Loan or credit volume
Lenders work to reduce waiting time and process loan applications as effectively as possible.
But this is not always the case. When there are not enough loan offices and the demand is too great, the time lapses may increase.
2.- Type of lenders
If it is a specialized mortgage lender, the waiting time may be below.
But if a lender, bank, or credit union works with different services, the matter will become even more complicated.
The amount of work on the table will represent quite long processing times.
3.- Team of lenders
It is important to know that smaller lenders will provide you with a loan officer to handle your application.
The larger companies will assign a more complete and complex professional team to work on your case.
If several people handle your application, response times will be greatly reduced.
What happens if the house does not pass the appraisal process?
The appraisal will evaluate whether the property’s value is equivalent to the sale price. But we already know that. If the review comes back lower, the assessment will be disputed.
During this process, your agent will have to prove his point. They will provide prices of similar homes to convince the lender that the house is worth more than what was appraised.
Another feasible option is to renegotiate the sale price with the property owner. In addition, you can pay with your money to make up for the shortfall.
This can be a much bigger risk. The recommendation is not to buy the home if the appraisal is lower than the sales price.
This result is because the home could not meet the standards required by the loan. After the appraisal, the lender may conclude that the home’s problems are too severe to be repaired. Therefore, it will reject the proposal.
But there is another way out: The lender may order repair work to be done before a new inspection. Once the problem is corrected, the company will make a new appraisal to decide whether or not to approve the loan for the purchase.
Differences between appraisal and home inspection
The two procedures pursue different objectives. But before approving a loan, it is necessary to apply for both of them. Let’s explain the difference between them:
- Appraisal: It provides the lender with useful information related to the real value of a property. The data provided by this appraisal will influence whether or not to approve a mortgage loan.
- Home Inspection: Provides a more detailed look at the physical condition of the property purchased. It indicates to the buyer the flaws it presents and the work it will require in the future.
The inspection is important. If it shows any significant defects, there will be room for renegotiating the price. But it may also obligate the owner to carry out repair and maintenance work to continue with the transaction.
We have already answered some of your questions. One of them is how long to close on refinance after inspection. But other questions have arisen that we will be happy to answer to clarify any doubts.
What happens after the refinance appraisal?
If the appraisal has been favorable and the purchase value has been determined, the lender must set clear loan terms.
What happens after the appraisal?
The mortgage must be underwritten. Then, the underwriter will have to review each file to verify that everything is in perfect condition. He will also confirm that each of the documents is in order.
Can a house with problems be appraised?
The owner must correct any problems with the house. The intention is that the property’s value will be maintained after the appraisal.
You will need to pay attention to bad flooring, broken windows, or appliances in poor condition.
Why does an appraisal take a long time?
One of the causes of the delay may be the number of requests that arrive at the financial institutions. They must attend to all of them. Perhaps the company does not have enough staff to speed up each process.