There was a refinance BOOM in 2020 and 2021 now because mortgage rates plummeted to all-time lows. Well-qualified borrowers are getting much lower rates than headline averages. Just be aware of a mortgage refinancing miscalculation that can prove to be costly: the lender taking forever.
Let me tell you one of my favorite jokes.
Elizabeth, Donald, and Joe are stranded on a desert island. Their plane crash-landed and they miraculously survived.
After living off of only coconuts for two weeks, Donald looks into the distance and thinks he sees land. He’s not sure whether he’s delirious, but he convinces Elizabeth and Joe that there’s only one way to find out.
After swimming for more than eight hours, the gang of three happily realize Donald really did see land! They’re elated.
About 30 minutes away from shore Joe suddenly stops and says, “Folks, I’m too tired to continue. Go ahead without me.”
Joe then decides to turn around and swim all the way back to the island.
During my mortgage refinance, I pulled a Joe. Let me explain why. It was the hardest refinance ever.
A Costly Mortgage Refinancing Miscalculation
After two months into my mortgage refinance process with Citibank, I decided to cancel. We were only seven days away from closing.
I was refinancing a 5/1 ARM at 2.5% into a 10/1 ARM at 3% for a cost of $1,500. If I did not refinance before August 1, my rate would reset to 4.5%. I canceled in late May.
The main reason why I canceled with Citibank was due to broken promises. Citibank promised me 2.875% if I just locked with them the week I did at 3%. They said they would get my rate down by 0.125% the following week, but they never did.
Not one to reward broken promises, I decided to hunt elsewhere. I still had two months of time before my ARM reset. Adjustable rate mortgages are better than 30-year fixed-rate mortgages.
Found A Better Mortgage Rate
I found a better deal with Wells Fargo which offered me 2.875% for a 7/1 ARM with no refinance fees plus a $2,000 credit. Getting a 0.125% lower rate and $3,500 in savings was tempting, even if I had to go through the pain of transferring $750,000 in assets to the bank. I didn’t mind transferring one of my portfolios because it was mostly full of 20-year municipal bonds that I’d hold on forever.
So I went back to Citibank and asked them to match Wells Fargo’s offer of 2.875% because Citibank said they would be willing to match a better offer once I locked. Besides, Citibank had originally promised me 2.875% anyway.
To keep things simple, I was even willing to accept 2.875% and pay $1,500 in refinance fees with Citibank instead of receiving 2.875% and a $2,000 credit from Wells Fargo.
Surely, Citibank would agree. After all, I’d been a good customer since 2001, had multiple accounts, and had referred them tons of business over the years.
However, because Citibank reneged on its oral promise, I felt obliged to cancel with Citibank. Otherwise, I would have felt like a loser who had been taken advantage of. So I told them to cancel all the work we had done up to that point and refund me the upfront appraisal and credit check fees, which they thankfully did.
I wasn’t completely starting over with Wells Fargo because I already had all the documents they needed due to my refinance process with Citibank. But I was taking a gamble because Wells Fargo was a new relationship.
The Wells Fargo mortgage representative said that two months should be enough time to get the refinance squared away so that I’d be paying the lower 2.875% rate come August 1st instead of my new 4.5% rate.
I believed him. Oops.
A Crucial Mortgage Refinance Miscalculation
It turns out, my Wells Fargo loan officer was wrong. I’m now in my third month of refinancing. The refinance has taken so long that I had to resend several brokerage documents for underwriting because they had expired. When will it ever end? I don’t know.
My loan officer said that because mortgage rates have continued to go down since we locked, there’s a huge backlog of applications their underwriters have to go through.
Based on public data, mortgage refinancing volume is up some 50% YoY in July. When August data comes out, I’m sure the increase will be of similar magnitude. It is a mortgage refinancing bonanza!
The only silver lining is that I’ve been able to pressure them to re-lock to a lower rate given the process is taking so long. I’m now at 2.75% with $4,000 in credit from 2.875% and a $2,000 credit, if I move over $750,000 in assets.
More Mortgage Interest As A Result Of Delays
I’ve calculated that each day past August 1 my mortgage refinance does not close is costing me an unanticipated $33.56 in interest because I’m paying the new 4.5% rate instead of the new 2.75% rate. Over a 30 day period, that’s an extra $1,005 in mortgage interest.
This is disappointing because I pride myself on taking into consideration every single variable possible to make the right choice. The one variable I did not anticipate was the loan officer overpromising and underdelivering by so much.
One of the most common sales tactics is to lure you in with a deal that sounds too good to be true For example, car dealerships used to advertise a smoking good deal for a car in the paper with the fine print “only one available at this price.” By the time you got to the store, the car was of course gone. All that’s left are the full-price vehicles.
I took a risk with a new lender who is not delivering. At least I don’t have to pay for the rate extension.
Refinancing Your Mortgage Will Take Longer Than You Think
Long gone are the days when you could refinance in 30 – 45 days. You will most likely need a mortgage rate lock extension, so ask how much one will cost beforehand.
Due to COVID-19, things are backed up in the underwriting departments of major lenders. Further, due to pent up demand, lenders are super busy.
When I took out a new mortgage in 2014 for my current residence, it took about two months to close. If you were to refinance today, I would mentally bake in it taking 3 – 4 months to successfully complete a refinance.
A 3 – 4 month closing period is particularly pertinent for Adjustable Rate Mortgage (ARM) holders who are facing an expiration of their fixed term. Your ultimate goal is to refinance an ARM the week its set to reset.
30-Year Fixed Rate Mortgages Are OK
For those with 30-year fixed mortgages, it shouldn’t matter as much how long the refinance takes because your mortgage rate isn’t resetting.
But to save money, you should still refinance and push to have a quicker close. Paying a 30-year fixed-rate mortgage has already been proven to be a suboptimal choice as interest rates have come down since the late 1980s.
Make sure you calculate the estimated extra interest cost you will pay if you do not refinance by your target date. Make sure the bank also covers all mortgage extension fees if they cannot deliver.
If you are choosing between banks, going with the bank that can refinance your mortgage quicker, even if they are charging a slightly higher rate, might actually be better. You must not only calculate the true cost differential between two banks, but also the extra hassle you must go through to deal with a bank with a long close.
No More Refinancing After This
Once my refinance is completed I will solemnly swear to never refinance a mortgage again. I plan to pay off my principal residence mortgage before it resets in September 2026. Refinancing a mortgage is too difficult. Besides, mortgage rates are higher due to inflation.
If I don’t because I found some sweet property in Hawaii before then, it shouldn’t matter because by then the mortgage will be so small by then that even a large jump in interest rates won’t make a difference to my cash flow.
If you smartly plan on refinancing your mortgage today, I wish you better luck than I’ve received so far. Perhaps don’t be so stubborn and “pull a Joe” if you value your time and sanity. Fingers crossed my mortgage refinance will be done by the end of this month. When it is, I’ll share the final details and some new lessons learned.
Invest In Real Estate More Strategically
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Take a look at my two favorite real estate crowdfunding platforms. Both are free to sign up and explore where no mortgage is needed.
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I’ve personally invested $810,000 in real estate crowdfunding across 18 projects to take advantage of lower valuations in the heartland of America. My real estate investments account for roughly 50% of my current passive income of ~$300,000.
Don’t let a mortgage refinancing miscalculation derail your real estate purchase plans. Investing in private real estate is less stress and way more passive.
Hi Sam + FS community,
Avid reader and sparse contributor here. Also not a math guy – which is why FS is my bible! Thanks for everything you do, Sam!
I’m currently exploring a refinance, although my current mortgage is pretty good (30 yr fixed @ 3.5% in which i’m 3+ years into). I am forecasting that we will move into a new house sometime in the next 5 years.
Currently, Citibank is quoting me 3% on a 15 yr fixed with .5 points. I am in their second tier of relationship pricing. I have negotiated a $500 credit for the appraisal, although i’m trying to get a flat out waiver for the appraisal fee since i’ve had one completed on the property in the last 12 months, and instead apply that $500 to the other fees (application, credit pull, possibly the .5 point?).
Right now i’m calculating a ~3yr breakeven which would not make sense for us to go through with the refinance transaction at this time. However, the Citibank officer is telling me the following – should i take this into my calculations, or is this a bunch of bologna?!
“Keep in mind that you will be able to miss a mortgage payment that will allow you to more than double your first mortgage payment.
This will greatly reduce the initial cost of doing the loan. By making that large first payment to your mortgage you will greatly reduce your principle balance.”
Thanks for the great info. I have a 10/1 ARM with Citi from 2015 coincidentally also at 3.0%. I’ve been paying it down (principal $1M+) slowly since the after-tax cost of carrying the loan seems really reasonable. Probably going to wait until year end and refi into another 10/1 if rates remain where they are or go lower.
We converted our primary residence to investment rental in 2017 when we moved out of US to Hong Kong. Our rate on the property when we purchased was 2.625% 5/1 arm. I have been following the USD 1 year libor to see where it is and what my reset will be when it happens in 2019 (original purchase was in 2014).
I spoke with a couple of brokers for refinancing, but they had a hard time comprehending that my salary is in HKD. My wife and I are both US citizens, and we file US taxes annually.
One bank was very easy to talk with (we have our accounts with them), and they said they can refinance. I visited their office on my last trip to US in June, and then we started the refi discussions. In June, I was told I can get a lower rate for 30 day lock, and I said that can be done. I don’t have to come up with any new cash as there is nearly 50% equity in the property. 2 months later when I was ready to go through refi, bank told me that they can no longer do 30 day refi, too much demand for refi and the bank can’t handle the capacity!
For now I will let my rate reset with my current lender, and will work on refi with the everyday bank … they’ve offered me 10/1 arm interest only, with the option to paydown principal whenever I want without any penalty.
James M says
2 year treasuries, 10 year treasuries and maybe even the entire government yield curve is likely to go negative in the USA.
If the USA mortgage market behaves anything like Germany and other European markets, that will translate into mortgage rates of around 1% to 1.5% in the USA.
Since Japan and most of Europe now has negative government interest rates, we are starting to see a lot more money flooding the USA treasury bond market. The USA is the only game on the planet where they can still earn positive returns. I expect it to happen within the next 2 years.
I have had several properties/mortgages. In my experience, mortgages written with one of the big banks (BofA, Citibank, Wells) have been retained and serviced by the banks. My primary home mortgage (jumbo loan) was through a broker. The rate was better. However, the servicing has been sold 4 times in 5 years. I would much rather have one servicer for the life of the loan. I feel that this adds the possibility of error servicing the loan with so many different hands on it. I have tried to stay on top of it, but it is difficult. Brokers on this post: Am I wrong?
I am a broker here in California and although processing times have increased, I still close refinances in less than 30 days easily. Large banks can’t handle the influx of loans so they increase their rates to slow down business. Reading the comments above, it is rather entertaining to see the opinions of brokers, but of course everyone has their own experiences to base their opinions on…to each their own.
The key is to find a trustworthy, experienced, and reliable broker (financial advisor, CPA, etc. Any financial services) so you don’t have to worry about empty promises. Most likely, you just haven’t found a good one.
Is it better to work through a mortgage broker or go directly to the financing source (bank, credit union) to get the best deal?
I refinanced a 30 year through Schwab Quicken in August 2016, the last time rates were this low. I have accounts at Schwab. From my first phone contact with Quicken to the day they came to my house with the closing documents was 23 days.
Financial Samurai says
Good to hear. Things are taking longer now as there is a huge pile on to refinance.
23 is the fastest I’ve heard in a while.. and perhaps forever!
What are you earning on the $750k muni bonds? That much more than 2.75%?
Why not just pay off the mortgage?
Financial Samurai says
I bought a ton of muni bonds in 2017 after I sold one of my SF rentals to simplify life. The average double tax-free return is about 3.25%. And, there’s been capital appreciation of the bond funds etc.
It’s probably not a bad idea to cash out, but the $750 is just one part of an overall diversified portfolio. It’s nice to have some liquidity on hand with no tax consequences.
How about you? Did you pay off your mortgage? And at what interest rate was it?
Cindy Katz says
Why is your blog advertising Lending Tree for mortgages but you chose Citibank and Wells Fargo. Why didn’t you go to Lending Tree if that is where you are sending the readers of your blog?
Financial Samurai says
I like to use LendingTree to get a written email quotes as a baseline. It’s a one stop shop where you can get multiple quotes at once, so it’s more efficient.
Once I understand what the market is, I try and negotiate with my existing bank who has my mortgage to get an even better rate. It’s all about pitting as many lenders against each other to get the best rate and terms possible.
I highlight Wells Fargo here, but I’m not sure how many people have $750,000 – $1,000,000 to get their relationship pricing. So I’m not sure how helpful that is.
What’s your situation? Thx
James M says
I recently bought a new primary residence and went through the mortgage process. I wanted to try to apply to 2 or 3 mortgages at the same time, then pick the best deal at the end. But my real estate agent really advised against it. So I unfortunately went with just one.
Then at the end a bunch of ridiculous fees were on the closing statement that were WAY off from the earlier closing estimate. But at the end you have no time or other options. So I had no leverage to “walk away”. We had a good deal on the overall house price, because it was a stress sale by the sellers (not a short sale, but they were desperate). But I got screwed on the fees.
In a refinance, obviously you have more time and flexibility to play lenders against each other or walk away and stick with the current mortgage. But what about when getting an initial purchase? Is there a way to play multiple lenders against each other?
If anyone has an opinion for me….Just bought this house in February (first payment was April) 30 yr fixed at 4.875%…I have paid the principal down to $132k. At the rate I am going, I will have it paid off in 3 yrs. Is it worth it for me to refinance to a lower rate, if I am going to be paying it off in 3 yrs?? You can see my amortization schedule at americanseniorcitizen.com
Thanks everyone….btw Sam, you are one of my inspirations…thanks for writing your blog.
aka American Senior Citzen
Money Ronin says
Sorry to hear about your delay. We exchanged some refi info in the FS forum when you were going with Citibank and I was going with Wells. My relationship with Wells is likely similar to yours with Citibank. It took at least a month longer than promised to complete and lots of weeks with no updates. I closed early July.
Same experience when I subsequently applied for a Wells HELOC which was unceremoniously denied by letter. My private banker is looking into it but even she hasn’t been able to get an answer. The underwriters are just slammed.
At least you got the better loan.
This is an honest and sincere post of an epic failure in the battle of David the banker vs Goliath the banker. In myth David won, but in real life, David will lose every time!
Wells Fargo and Citibank are big business entities that are competing in an arena of razor thin basis point.
They made money from the thinly margin multiplied with endless low net worth clients (90% of the population) compounded gain over time.
Essentially, you are trying to squeeze the thin margin by making it even thinner.
Had you succeeded the system will evolved, artificial intelligence, and close for the next guy who try duplicate your hack. Otherwise, it will be out the business and you will become the Goliath banker since you just slaughtered the vulnerable system.
In practically, it is best to invest time and effort in the utility for the mass. Try to build the ever higher net worth by hacking system above your pay scale will be paid in full with your HEALTH down the road.
Actually, you did the Elizabeth because Donald, your financial intellect, though it was land. It was a mirage!
I feel your pain. Refinancing with Wells Fargo. Had mortgage with them for over 10 yrs & just got approval notice approaching 60 days, not surprised if it takes another 30 to close.
I am in a refinance process now with a close date of next week. Will be a total of 28 days from app/lock to close with Hancock Whitney including physical appraisal.
Sam-I am the person who introduced you to the Wells Fargo Mortgage person. I understand how you feel but believe me my own refi for an investment property took 2X longer than usual. I was extremely frustrated like you. Overall I have been very happy with my WF experience. They have usually come through. Have done 3 refi’s this year with Wells and hope to do one more. Saved $24K a year…worth the pain :)
I recommend refinancing through a credit union.
Getting our mortgage and our first refinance were painful processes with lots of back and forth, paperwork, and confusion on the part of the lenders. Our last refinance through our credit union was simple, straightforward (two meetings total I think), and we got a great rate that we will keep till the house is paid off. I wish we’d just gone with a credit union from the get-go!
Underwriters nit pick the files. If you have a lot of self employment revenue streams you go to the back of the line at big lenders like that. I’m a broker, so I know if someone is looking for a smoother process, those banks are not where you g.
GenX FIRE says
We did a refi a couple of years ago to get us to 3.25 on a fixed 30 year VA mortgage. We were also under the jumbo limit at that point. We paid about 22% down up front, so there was no mortgage insurance for us. We’ve made a bunch of principle payments and are now down under $225k. We plan on paying it off in 10 years or so, perhaps a bit less, but I am wondering if we should refi again now to a 15 or something; even a 7 arm. One thing holding me back is the proliferation of negative rates around the world. Greenspan even said they might come here. I wonder if they will, and if waiting a year might make it even more economical for us.
GenX FIRE: As I understand it, there’s no mortgage insurance with a VA loan anyway.
Refinancing is a royal pita but worth it if there’s enough savings. It definitely takes a LOT of patience these days, paying attention to details so one gets them the correct docs the first time and thus not lose time having to resend different docs, and also be proactive to ask for regular updates to make sure nothing slips through the cracks. How annoying you had to resend some statements because the older ones expired bc the underwriting team was taking so long. And that’s too bad that Citi disappointed you like that. Sounds like a bait and switch – I hate that feeling. Best of luck closing with WF!
Eric J says
That sucks about all the delays you’ve experienced. I’m about to refinance a rental property, but it’s with a small community bank and they always move quick. Did you ever consider a smaller bank? My experience with community banks has been much better, and I got better rates too… but I wasn’t getting jumbo mortgages like you…
Also, curious if you’d ever consider an interest only mortgage? Charles Schwab offers low rate interest only mortgages in the low 3’s, and even lower if you transfer money over. They are structured as ARMs with a fixed rate periof, but I believe the first 10 yrs are interest only and then it becomes a 20 year amortized loan. If you can deduct the interest on your taxes and your property is appreciating around 2% or more per year, you’re basically borrowing money for free while freeing up cashflow for better investments than a house. It’s like a bond on a house…
Steve B says
Great site with great information.
I have a rental property that I want to refinance. with these rates, I’m looking at a 30 year fixed. I know that at some point rates will rise and i don’t want to be stuck in a 7-yr Arm only to have to refinance.
What is your philosophy on the ARM vs the Fixed? Did you write a previous post and if so do you still believe that post makes sense in today’s market?
Financial Samurai says
Sure. See: 30-Year Fixed or ARM? The Choice Is Clear
I am a big believer that interest rates will stay low for the rest of our lifetimes. BTW, I try and link to relevant articles at the end of each article. This is one of them.
I wish I knew how you get these low rates. I am looking at the same refinance options and don’t get quoted anywhere near the same rates. My credit is excellent and I have equity. I guess my issue is that I don’t bring enough cash to the bank. Chase alluded that unless you bring $250K to a savings account with them, they won’t offer a rate discount.
Financial Samurai says
The relationship tiers are usually: $250,000, $500,000, $750,000, and $1,000,000+. The more you bring, the better rate you can get. Also, the larger the loan, generally the better rate you can get b/c they make a larger absolute dollar amount off a larger loan.
Thanks for sharing. My 5/1 ARM at 3% with Wells Fargo expires in February 2021, so I am thinking about refinancing. When I called them, neither the rate nor the fees seemed appealing. Maybe I need to call again, or as another commenter suggested, work with a broker..
I just called my Wells lender who is nationwide top lender. He said Wells is not doing well on refi rates right now because underwriting completely overcapacity. But they are doing well with rates on primary purchase. He said come mid October (likely related to seasonal slowdown of primary home purchase) they will lower refi rate to be competitive to primary purchase rate. He said today Citi and BOA have the top refi rates.
Thanks for sharing your experience. There should be some repercussion for the loan officers. It’s ridiculous to overpromise like that. We’re looking to refinance this month. My credit union doesn’t have the best rate, but I trust them. I’ll shop around a bit and see if it’s worth going with a different bank.
Your major glaring mistake here is dealing with a bank and not going through a mortgage broker. In many cases, brokers can get an appraisal waiver, which eliminates the longest waiting period in a refinance transaction. Brokers only get paid when the loan closes as opposed to bankers who get a paycheck every two weeks. You can close within 30 days with a broker.
Financial Samurai says
Sure. Let me know how your experience has been with a mortgage broker. What rate did you get, how big was your loan, and what city are you in?
I’ve only see appraisals waived here in SF if a buyer is paying cash.
Why would you think a bank would be willing to waive an appraisal based on a mortgage broker’s advice?
Depending on the risk profile (determined by a software program) of the property/borrower and the requirements of the specific investors the broker has access to, around 80% (from what I’m seeing) of rate and term residential mortgage refinances can get an appraisal waiver.
I would suggest looking for a small, private mortgage bank if you don’t have hundreds of thousands of dollars in deposits to temp a credit union or large bank with. Small mortgage banks have the flexibility of adjusting their capacity to the size of their pipeline keeping overhead (read: pricing) relatively low and they can keep close times as short as legal requirements, 3rd parties such as escrow, appraisal turn times, and the borrower getting in their documents allows. An example of this would be that they might be ready to close in the legally minimum 9 days except for the appraisal, but when you consider the often 7 day (often longer) wait time for the appraisal, 2 days of wait time for underwriting the appraisal and getting the closing disclosure issued (which is insanely fast for a market this busy), the legal 3 full days between issuing the closing disclosure and closing, and the 3 days right of rescission after closing you’re taking a 2 week close out to 3 weeks or a month at minimum just waiting around (days above are business days mind you). Good news is that’s a month worst case instead of 3, but the pricing won’t be better if you have a large amount of deposits to offer (like you do).
Financial Samurai says
Very cool. Did you get an appraisal waiver? If so, can you tell me the details of your mortgage refinance and where you are based? Thx
Ben E. says
I used a mortgage broker. I refinanced from a 30 year and locked in a 15 yr at 2.875% with no credit/costs AND an appraisal waiver (October 2017). My broker told me it was lender specific about whether I’d be able to get one. It could be because I recently purchased the house within a year that the prior one ‘counted’ but the broker didn’t mention that the availability of a recent appraisal made a difference one way or the other. BTW – I’m in Phoenix.
Financial Samurai says
Gotcha. Thanks for sharing. Yeah, a recent purchase with an appraisal within the last year definitely should help with a waiver. Good call!
An appraisal generally takes about 1 to 2 weeks. So a waiver can definitely help.
Eric J says
Thomas – the only way a bank is ever willing to waive an appraisal is if you’re requesting a really low LTV.
For a savvy borrower willing to call around to get rate quotes, a mortgage broker adds no value. I spoke to one last week in fact, and he couldn’t even match the offers I had got.
Mortgage brokers are good for the uninformed or for people who don’t want to put in the time and effort.
Mortgage brokers can be just as bad. I’ve experienced similar bait and switch Sam describes using a broker.
Interesting and timely post. A little something to add from my experience.
Wells and BAML has been quoting me the same refinance rates for the last three months (7yr ARM 3.00%). When I reference the move in the 10yr UST over that time and ask them to explain how refinance rates are lagging so far behind purchase rates I finally got them to conceded that they are so swamped on refinances that they are purposely keeping rates high.
I’m not in a huge rush- my mortgage is less than a year old (7yr ARM 3.625%). With the belief that rates will stay low I’m optimistic I’ll have a chance to refinance when demand tapers off and I get a rate which I consider to be more in line with the market.
Financial Samurai says
Good to hear demand is so strong for BoA as well. Bullish for the economy!
In the middle of a refinance and can vouch for the “underwriting backlog” comment. We locked on August 7 and it made it through underwriting on August 30. Expecting 2-3 weeks to close now.
Nonetheless, refinancing a 30-year, 3.675% to a 15-year, 2.50% was a non-thinker for us, the refi should keep an additional $40k or so in our pockets over the next 15-years.
But explaining bank deposits, addresses on credit reports, gathering documents and the constant docusigns becomes quite cumbersome.
Recovering Engineer says
Where the hell did you find a 15-year for 2.5%? I can’t find anybody even close to a rate that low. I’m in a 30-year at 3.75% and nobody can quote me anything that saves money after including the refinance costs.
Rate locked via local broker in Southern California with a 1.585% discount point on August 7, 2019.
Who is offering a 15year fixed at 2.5%. I have not seen rates like that since 2012. Please share so others can peruse.
Doug H says
My wife and I just refinanced on our newly built house yesterday. You’re 100% accurate, the process will take longer than expected. We were promised to close on August 1st and that spilled over to September 4th! We were able to get a lower interest rate due to the lag, but it took some pressuring and persistence on our part.
On a side note, Sam, your site is a regular stop for me. Absolutely love it. It’s made me think different about finances. Keep up the great work!
Sixty Months says
Sorry to hear about your experience, that sounds very aggravating. Especially when your relationship bank can’t make it happen for you.
I just did a refinance and it has surprisingly been very quick and easy. I applied and locked my rate on August 7 and closed on August 30. The rate only went from 3.75% to 3.375%, but I had been paying a bunch extra on principal and wanted to lower my monthly payment.