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Best Mortgage Refinance Companies

Refinancing your mortgage is an excellent way to secure a better interest rate, leverage your home’s equity, or lower your monthly payment. To get this done, you need the best refinance providers for mortgages. By working with the best lenders, you can save money or reduce the length of your mortgage so that it is paid off quickly. You can also tap your home equity without having to sell it. The primary way to start is by shopping around for lenders with the best offers. Our guide covers the best mortgage refinance lenders of 2022.

Best Refinance Companies

Refinancing your mortgage involves replacing your existing loan with a new one, usually from a different lender. You are closing one loan and opening another, typically reducing interest rates and monthly payments. It can temporarily affect your credit score too. We compared many lenders before compiling our list of the best choices for borrowers looking to refinance mortgages. We considered factors like your ability to get a loan, loan options, affordability, and funding speed. Here are the best mortgage lenders for refinancing your loan.

Lender Minimum Credit Score Down Payment Days to Close Mortgage Rate
Rocket Mortgage 580 0% – 3.5% 21 days National Average
loanDepot 580 3.5% 45 – 60 days Below the National Average
Zillow 580 3% Up to 60 days Above the National Average
Better 620 3% 32 days Below the National Average
Navy Federal Credit Union N/A N/A 30 days Below the National Average
Ally Financial 620 20% 36 days Below the National Average
Nationwide N/A 10% 30 days N/A
Bank of America 620 0% – 5% 30 – 45 days Below the National Average

 

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 

Cons

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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 

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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%

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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%

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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 

Cons 

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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%

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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%

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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 

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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:

Requirements For the Best Mortgage Refinance Lenders

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

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.

FAQ

  • Is it cheaper to refinance with your current lender?

There is no guarantee that it will be cheaper to refinance with your current lender. You can only consider your existing lender if they can offer you a better deal than other options. You are not required to refinance with the current lender.

  • How do you qualify for a refinance?

To qualify for a refinance, you need a favorable current mortgage loan, an average debt-to-income ratio, sufficient home equity, a good credit score and enough cash to cover the costs.

  • Who has the best refinance rates right now?

You can get the best refinance rates from Rocket, loanDepot, Zillow, Better, Bank of America, Nationwide, Ally Financial, and Navy Federal. These are the best refinance lenders of September and 2022 in general.