If you have VA benefits, you may be eligible for a VA refinance whether you have a current VA loan or not. The VA offers two types of VA refinance loans – the streamline refinance and the cash-out refinance. Each loan has its own requirements and the time it takes them to get to the closing table.
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Just how long should you plan for your VA refinance to take? It depends on the factors below.
The Lender’s Turnaround Time
One of the largest factors in your VA refinance loan’s turnaround time is the lender’s workload. As you shop around for the right lender, ask about their average turnaround time. They should be able to give you a ballpark figure. It often depends on their workload at the time as well as their standard operating procedure.
Some lenders require appraisals on every loan, including streamline loans, which can slow the process down a bit. Other lenders let the streamline loans sail right through underwriting, getting them done in as little as a week or two. If you are applying for a cash-out refinance, you will have to verify every aspect of your application, including the home’s value, which can add time to the process.
Ask lenders about their general timeline so that you have an idea, but the lender isn’t the only factor in the turnaround time.
Do You Have the Required Documents?
You play a vital role in the time it takes to close your VA loan too. In fact, it all starts with you. Lenders need specific documents in order to start the loan process, if you don’t provide those documents all at once, it can delay the process. The underwriter will have to tell the loan officer who will have to tell you. This ‘game of telephone’ can add time to the underwriting process.
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In order to minimize the amount of time it takes, have the following documents ready when you apply for a mortgage:
- Paystubs covering the last 30 days
- Asset statements for the last 2 months
- W-2s for the last 2 years
- Tax returns with all schedules for the last two years if you are self-employed or work on commission
- Contact information for your employer for the verification of employment
- Any Letters of Explanation that you need to explain negative economic events or other negative aspects of your loan application
The more documentation you can provide up front, the less time it will take to close on your loan.
Are you in Communication With Your Lender?
This aspect of the loan process takes both you and the lender into consideration. The lender is responsible for underwriting the loan and figuring out where you stand. Once the lender knows that they need additional documentation, they will call you. If you don’t return the call or provide the necessary documentation quickly, it could slow the process down.
If you notice that your lender hasn’t been in communication with you recently, it’s not a bad idea to check in with them. This way they can tell you if there are any missing documents or at the very least, update you on the loan’s status.
The bottom line is that each VA refinance takes a different amount of time to close. You can have the fastest closing by choosing the lender with the fastest turnaround time and by cooperating with what the lender needs.
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