Best Mortgage Refinance Companies

Rocket Mortgage

Rocket Mortgage is at the top of our list, with a good reputation for providing refinancing and other loans. It was the top lender for customer satisfaction from J.D Power for eleven years. Rocket Mortgage provides an easy experience as you can easily apply online, and down payment options are as low as 0%. The fixed-rate terms are as low as eight years and offer a high acceptable debt-to-income.

Details 

Minimum Credit Score: 580

Days to Close: 21 days

Mortgage Rate: National Average

Minimum Down Payment: 0% – 3.5%

Pros 

• Top-rated mortgage company by JD Power.
• Easy online application process.
• Offers a mortgage refinance rates calculator.
• Down payments are very low/nonexistent.

Cons

• No in-person service.

Bottom Line

• Rocket Mortgage is ideal for those who want the ease of applying online and have a good credit score. It has an A+ rating from the BBB.

loanDepot

loanDepot is one of the most popular refinance companies, although it is also known for its FHA/VA lending. The lender features a mello smartloan platform online, making the refinance process easier. loanDepot has over 200 branches, so you can also get face-to-face services. The fixed-rate terms go from 10 to 30 years.

Details 

Minimum Credit Score: 580

Days to Close: 45-60 days

Mortgage Rate: Below the national average

Minimum Down Payment: 3.5%

Pros 

• Digital loan technology for quick application and ease.
• Different branches for face-to-face service.
• Waives lender fees with a lifetime guarantee.
• Pays back appraisal fees on all refinance after the first one with the lender.

Cons

• Barely any information online about its rates and fees.

Bottom Line 

• loanDepot features a BBB rating of A+ and can digitally confirm your assets, income, and employment. There are different customer discounts to enjoy.

Zillow

Zillow does not make its refinancing rates clear online. But, it’s the top choice for connecting with a wide range of licensed lenders across the United States. Along with its list, many tools help the person choose the right refinancing plan. You can work with Zillow Home Loans or other recommended mortgage providers.

Details 

Minimum Credit Score: 580

Days to Close: up to 60 days

Mortgage Rate: Above national average

Minimum Down Payment: 3%

Pros 

• Provides a user-friendly downloadable mobile app.
• You can complete most of the applications online.
• Offers a wide range of resources for newbies.
• Gives competitive rates, which are updated daily.

Cons 

• Not licensed in all 50 states.

Bottom Line

• If you’re looking for a reliable refinance mortgage, you can contact Zillow Home Loans or their other recommended lenders. Most rates are unavailable online, but you can contact them to get started.

Better

Better come with various perks and features that borrowers will enjoy. The mortgage refinance lender does not place any origination fees and has low mortgage rates. The online experience is excellent, so you can save time and apply fully online. The fixed-rate terms start at 15 years. Better provides a price-match guaranteed rate.

Details 

Minimum Credit Score: 620

Days to Close: 32 days

Mortgage Rate: Lower than the national average

Minimum Down Payment: 3%

Pros 

• Instant loan estimates with 100% online application.
• No origination fees are placed on the mortgage.
• Fast closing time for pre-approval.
• A wide range of discounts to borrowers.

Cons

• Limited loan type options for refinancing.

Bottom Line

• Although Better does not refinance USDA or VA loans, it is still a good option for anyone looking for fast closing times and discounts.

Navy Federal Credit Union

The Navy Federal Union is only available to people affiliated with the military or their families. Also, the Department of Defense civilian contractors, personnel, and those who live with a Navy Federal Member. The union has refinancing options from 10-year loan terms and will refinance FHA and VA loans.

Details 

Minimum Credit Score: N/A

Days to Close: 30 days

Mortgage Rate: Lower than the national average

Minimum Down Payment: N/A

Pros 

• The online pre-approval process provides speed.
• Private mortgage insurance is not required.
• Friendly to those with a low credit score.
• Wide range of refinance loan types.

Cons 

• Membership is limited to military affiliates.

Bottom Line

• Aside from being suitable for those in or affiliated with the military, Navy Federal is the ideal choice for those with low credit scores. It offers low credit loans just like Carrington Mortgage Services, except that it is only for those related to the military.

Ally Financial

While Ally Financial has a limited range of refinancing options, it stands out for its jumbo loans going as high as $4 with a down payment of 20%. There are also fixed-rate, ARM, and cash-out loan types. You can start the process by submitting the paperwork online, but you must visit Ally to complete this.

Details 

Minimum Credit Score: 620

Days to Close: 36-day average

Mortgage Rate: Lower than the national average

Minimum Down Payment: 20%

Pros 

• There are no lender fees.
• Online application, electronic signature, and document uploads.
• No PMI, and the down payment is 20%.
• Getting quotes does not affect the credit score.

Cons 

• You need to pay PMI if the down payment is below 20%.

Bottom Line 

• If you want to get jumbo loans for mortgage refinancing, you should go for Ally Financial. Their loans offer a higher lending cap and a lack of lender fees for affordability.

Nationwide

Nationwide partners with AXOS Bank to provide mortgage refinance loans to its borrowers. The most popular is the Lease Option Program, where you have a 10% down payment and enough income for rent payment and closing costs. Nationwide will buy the home, and you sign to buy it fully within three years. This is beneficial to your credit score.

Details 

Minimum Credit Score: N/A

Days to Close: 30 days

Mortgage Rate: N/A

Minimum Down Payment: 10%

Pros 

• Friendly to low credit scores.
• Free consultations.
• Matches the loan estimate offers of competitors.
• Ideal for self-employed people.

Cons 

• It operates in nine states.

Bottom Line

• Nationwide is the top mortgage refinance company for those who have poor credit. Aside from the Lease Option Program, there are others for low-credit borrowers and self-employed persons.

Bank of America

Bank of America offers an extensive lineup of loan terms and products, flexible interest rates, and fee discounts. The loan types are conventional, jumbo, FHA, and VA, while the fixed rate terms start at 15 years. The Preferred Rewards program offers impressive price reductions on refinance closing costs.

Details 

Minimum Credit Score: 620

Days to Close: 30 to 45 days

Mortgage Rate: Lower than the national average

Minimum Down Payment: 0% to 5%

Pros 

• Offers relationship interest rate and fee discounts.
• Loans go as high as $5 million.
• You can start and finish the application online.
• Accepts alternative credit data like rental payment history.

Cons 

• Does not offer renovation loans.

Bottom Line

• Bank of America is the ideal choice for member discounts, as it offers a lot of price reductions on refinancing closing costs.

What is Mortgage Refinancing?

Refinancing a loan, including a mortgage, involves getting a new loan with better terms and using it to replace the existing loan. For mortgages, you can use the best mortgage lenders to refinance your current loan balance. Remember that refinancing usually involves one debt, while debt consolidation involves merging multiple debts. It is also possible to get a new loan for a higher amount using the equity in your home if it is enough. Many people consider refinancing because of the lower rates. But, it helps change the term of your loan and use home equity to pay off a debt with high interest. If satisfied with your current lender, it is possible to refinance with them, but most people move to a new lender when refinancing a mortgage.

Should You Refinance Your Mortgage?

Mortgage refinancing is only worth it when you want to save on interest or access home equity. Here are some scenarios where you should consider refinancing your mortgage:

• If you want to reduce your monthly payment on your mortgage, you can get a lower mortgage refinance rate. But, you must not reduce the loan term or borrow more money.
• You can consider refinancing if you want to switch from an adjustable rate to a fixed rate or the other way around.
• You can extend your loan terms to reduce the monthly payments by refinancing your mortgage. But, this will attract a higher interest.
• Converting your home equity to cash is possible with refinancing, but avoid doing this for short-term expenses. Using your home equity poses the risk of losing your home.

Requirements For the Best Mortgage Refinance Lenders

There are specific requirements that you should keep in mind. These include:

• The interest rate is the most crucial reason you might apply for refinancing, so compare the different rates available to get a better deal.
• Another requirement is the value and equity of the property, as this helps refinance. Equity can act as a deposit and reduce how much you spend on refinancing.
• Refinancing is not free as you need to consider the application fees, discharge fees, valuation fees, and more. You might also have to pay a fee to your current lender when switching.
• Refinancing will affect your credit score, especially if you get rejected. You should first find out if you qualify before applying for the loan. Some mortgage lenders provide prequalification, so you know if you are eligible or not.

What Do You Need to Refinance Your Mortgage?

If you want to refinance your mortgage, there are certain things that you need for it to be successful. You need to prove your creditworthiness and income like any other loan, but home equity is also significant. Here is what you need to refinance your mortgage:

1.Low Debt-to-Income (DTI) Ratio

You have a good chance of getting your application approved if your income has stayed the same or increased while the debt has decreased.

2.Healthy FICO Credit Score

Most lenders require a minimum of 620 but can go as low as 580.

3.Loan to Value Ratio of 20% and More

Typically, most mortgage lenders ask for a loan to value ratio of 80% while the home equity is 20%.

Types of Mortgage Refinances

There are different types of refinancing that you can go for. These are:

Rate-and-term refinance

Here, you remove the balance of your initial mortgage and borrow at different terms and rates. You can get a lower interest rate or switch to fixed/adjustable.

Cash out refinance

This will help you change your interest rate and other loan terms and increase your remaining mortgage balance. You need to have enough equity in your home to cash out, and they will add the cash given at closing to your debt.

Cash in refinance

This is less common; you will bring cash to the closing for a down payment. It helps save interest if you have cash, providing a shorter repayment term and/or lower mortgage rate. You can try a direct deposit loan if you need the cash urgently.

No-closing-cost refinance

You don’t need to pay a closing cost but a higher interest rate. The loan allows the mortgage lender to forgo the closing cost and pay it as interest instead.

Streamline Refinance

You can also opt for this mortgage if you have one through the Federal Housing Administration, Department of Agriculture, or Department of Veterans Affairs. It usually requires less paperwork and no evaluation.

Alternatives to Mortgage Refinancing

If you don’t qualify for refinancing or you are considering other options, here are some alternatives:

1.Mortgage Recasting

You spend much money on the mortgage principal, so the lender will update the monthly payment. This is cheaper than refinancing, with the same interest rate and a small recasting fee. It is only suitable for those with a low mortgage rate.

2.Home Equity Loan

If you consider a cash-out refinance, you can get home equity loans or line of credit instead. This allows you to borrow money in addition to your original mortgage and makes sense with a low mortgage rate.

3.Loan Modification

Another alternative is a loan modification that helps you extend your repayment term. You can also switch from fixed to adjustable or reduce the interest rate without refinancing. Not all mortgage lenders offer this loan.

Conclusion

If you’re thinking of refinancing your mortgage, you can consider working with any of the recommended lenders on our list. While this isn’t writing off your debt, you can expect better interest rates and borrowing conditions through refinancing as long as you choose the right lender.