Banks have become quite slow in processing of refinance applications. Closing on an approved refinancing has gone up to 60-90 days from the former 30 days. This is due both to the reduction in processing staff that banks have instituted, and the increased documentation required of the borrower. Sometimes there is delay due to the more stringent appraisal evaluations. For many loans brokers are not longer allowed to choose the appraiser, in order to prevent the occurrence of appraisals biased in favor of the borrower.
The effect of this delay is that sometimes the rate lock-in expires, and the offered rate may be higher than that available at the start of the application process, making the loan terms less desirable. To compensate for this, some large banks such as Chase have increased the duration of their rate lock from 60 to 90 days.
Homeowners should keep this in mind if they are considering refinancing in an effort to capture a lower mortgage rate and monthly payment. Be sure to act early when the rates are low, and inquire as to the typical time required to process the loan, as well as the duration of the rate lock.