For mortgage borrowers, there has probably never been a better time to check what the best refinance mortgage companies have to offer. With interest rates regularly falling to new record lows, recent research suggests that around six in ten mortgage loans could be switched to a new mortgage at least a half-percentage point lower, with the potential to save an average of $283 per month on payments in the process.
But while the money saved could prove invaluable for those most affected by the coronavirus outbreak, a refinance mortgage can be used for many other purposes besides. If you’re currently reluctant to move home, the best refinance mortgage companies can release the value stored in your property, providing the funds to perhaps upgrade your kitchen or more drastically remodel your home. Equally, many might currently consider using such funds to help bridge financial gaps or pay down debt. If you’d prefer to leave your equity where it is, then there still remains the option to refinance your mortgage to a better deal and cut months, if not years, off the amount of time you have left paying off your mortgage loan.
Whatever your needs or reasons, our shortlist of the best refinance mortgage companies will point you in the direction of a mortgage lender appropriate to you. An attractive mortgage rate should always be on the cards at present, but which refinance mortgage company is best if you need to avoid upfront fees or want the most cost-effective package overall? Would you prefer not to leave the comfort of your home and want to apply for your new mortgage online, and who can deliver the reliable customer service that most will need at some stage when arranging a new loan.
Low interest rates mean it is also a great time for first time buyers to approach the best mortgage lenders, while seniors wanting to unlock the equity in their homes should find highly competitive terms among the best reverse mortgage companies too. However, the cards are probably stacked most in the favor of existing mortgage borrowers, which makes checking out the best refinance mortgage companies an absolute must at this moment in time.
Refinance Mortgages - how to compare quotes
LendingTree is a marketplace where you invite lenders to come to you. It's a great place to start your mortgage refinance search and offers competitive terms.VIEW DEAL ON LendingTree
If a refinance mortgage is on your agenda, you should always strive to get the very best mortgage deal that you can. Rates might never have been lower, but there will still be some mortgage lenders that charge more than others - this makes shopping around for the best refinance mortgage an absolute must.
With refinance mortgages available from many different types of lender - from banks and credit unions through to local and online lenders - the challenge is trying to compare what they have to offer. This is where the services of a comparison website, such as LendingTree, come into their own.
Most online marketplaces of this kind work in the same way - once you’ve completed one form, and shared all the relevant details, including the type of loan you’re looking for, where you live, the value of your home, your mortgage balance, and your credit score, the different mortgage lenders will then start coming to you with what they can offer. All that’s left for you to do is compare the mortgage quotes that you’ve been sent, and make your choice based on the rates, fees and terms that you qualify for.
1. Rocket Mortgage: Best refinance mortgage company overall
Rocket Mortgage, a subsidiary of Quicken Loans, is one of the slickest and most appealing of the best refinance mortgage platforms. The website is designed very well, giving you immediate access to the relevant loans and refinancing options you need.
Right from the start you can move into the area of refinance that’s relevant to you – equity, reduce payments, shorten terms – and you can find out more information about how each process works and what it means for your budget. The site also includes plenty of information through a FAQ, blogs and videos that talk you through refinancing options and solutions.
A note of caution is that using Rocket Mortgage will affect your credit score as soon as you apply. The upside, however, is the accuracy of the resultant quote, giving you an excellent indication of the deal that you can finally expect. It is also possible to avoid the risk of your credit score taking a hit by instead using the refinance and affordability calculators to get a rough idea of your anticipated costs.
- Read our Rocket Mortgage review
2. SoFi: Best refinance mortgage company online
SoFi offers you a relatively pain-free, very fast, extremely efficient and nicely streamlined refinance application solution. Everything is online, everything is accessible and you get your results in minutes. You can pre-qualify and pre-approve online and you can use the Home Loan Help Center to find out the information you need around credit scores and paperwork.
The customer reviews are mostly positive and the company itself is really proactive in responding to negative reviews as well, which is a nice change from the norm. That said, SoFi isn’t easy to use when it comes to finding out detailed information about its various packages and the initial administrative exercise of setting up and form-filling can be a bit more taxing than with some of its competitors. It should also be considered that the minimum credit score of 680 asked of its borrowers is a little loftier than some of its rivals too.
However, as a digital-only platform, SoFi manages to keep the rates and fees it charges customers relatively low, and are mercifully kept to a minimum in number, with no hidden or unnecessary expenses.
- Read our SoFi review
3. U.S. Bank: Best refinance mortgage company for the risk-adverse
In the pantheon of the best refinance mortgage companies, U.S. Bank is reputable, certified and packed full of features. Here you can refinance, you can mortgage, and you can do all the different bits in between. This is a great choice for someone who already has a U.S. Bank portfolio or someone who wants to work with a reputable company that gets them from point A to point B without risk. U.S. Bank has made a lot of effort to create a refinance solution that’s accessible and easy to understand.
If you have a favorable credit score and decent downpayment, U.S. Bank really comes to the fore, and with a presence in every single state, is truly available to all. You can use their calculators and pre-qualification processes to work out how much you can borrow and whether or not you’re going to save on your existing mortgage., while its customers reserve particular praise for the available online tools and support.
Perhaps understandably for such an established banking behemoth, the administrative side of things does not usually compare well with the streamlined solutions available from some of the newer digital kids on the block. Some additional costs might also see the overall price of the proposition rise a little beyond the norm too. However, at times such as now, reputation, steadfastness and trust - along with the broadness of its offerings overall - can count for a lot.
- Read our U.S. Bank review
4. Reali Loans: Best refinance mortgage company for low fees
Reali Loans is one of the market leaders when it comes to the best refinance mortgage lenders. The company consistently receives good customer reviews and offers a simple and straightforward process for applications and approvals. You will find the platform easy to use and the overall process very low on frustration and high on capability.
Estimated quotes will arrive almost instantaneously, followed by an explanation of ways to strengthen and fine-tune them, while there is the added option to experiment with different interest rates, monthly payment amounts and loan terms. It is also possible to revisit your fees, with the company's willingness to remove unnecessary charges and commissions a significant plus point.
The only thing that drops Reali Loans down in the rankings is that it doesn’t offer any home equity products, so that is off the refinancing table. That it is only available in 12 states also restricts its appeal, but if you are fortunate enough to live somewhere where access allows, a relatively stress-free refinancing experience usually awaits.
- Read our Reali Loans review
5. Guaranteed Rate: Best refinance mortgage company for cost-effective refinancing
With some great APRs, relatively low fees and friendly FICO credit score expectations, Guaranteed Rate offers customers an accessible and cost-effective refinancing option. The platform is clean and well-designed, with information easy to find. Indeed, it is possible to quickly locate their refinancing tools and their various requirements around down payments and credit scores, while the refinance calculator can be used to work out costs before you set down the application road.
One of the excellent value-added services that Guaranteed Rate offers to customers is its research center. Here you can find real-time neighborhood data information using your ZIP code or city name. The tool gives you insight into cost trends, taxes, ratings and more. It’s very useful for you if you want to know more about the value of your home and your refinancing options.
For prospective borrowers concerned that their credit history is perhaps not all that it could be, the minimum FICO score required by Guaranteed Rate of 580 is much lower than that of many of its rivals. In addition, the company has several physical offices behind its online presence, something that may appeal to those who prefer the more traditional method of managing their finances face-to-face. One thing to note is that the final list of services required by the lender usually ends up quite lengthy; there is nothing untoward and everything is clearly laid out for you to see, but the overall cost might creep up on you as a bit of a surprise.
- Read our Guaranteed Rate review
6. LendingTree: Best comparison site
LendingTree’s online marketplace brings together offers from various lenders – some well-known banks and some smaller lenders vying for your business on nearly any kind of loan, often with lower rates. This means by using their database you will find the best refinancing rates from the most competitive companies, regardless of whether you are looking for an established and reliable lender or newer company.
You can also find a lot of information on the website, including estimated rates based on your location, loan amount and credit score. In addition, you can preview each lender’s estimated fees. This provides you with a lot of information and gives you the knowledge you need to make an educated loan - knowing what it will mean both for you and your future home.
Once you fill in the offer form, lenders will begin calling you with offers - this can be both a blessing and a curse. On the one hand, it saves you the legwork of finding a refinance lender, but on the other, it also means their sales team will have your contact details, and will phone and email you about their latest offers. Depending on how much you value your privacy and hate direct sales, it might be better to find refinance lenders through good old fashioned research. Encouragingly though, LendingTree is trying to improve on its call handling system to prevent customers from being overwhelmed by sales staff, and wants to provide easier to find opt-out options.
As you compare rates and offers, pay close attention to the annual percentage rates; this will give you a more accurate sense of the loan’s actual cost. Once you choose an offer, the rest of your mortgage or refinance application happens with that lender. This site is best for people that are looking to find the lowest rates possible on a refinance as it gives you a robust, comprehensive view of the market and includes many smaller lenders you may have overlooked.
- Read our LendingTree review
Why trust us about refinance mortgage companies?
We’ve been writing about mortgage refinance companies for eight years. There are many options, including local banks, credit unions, and online mortgage lenders, but we focused on banks and other institutions that serve large audiences.
We chose to include LendingTree because it’s a trusted online refinance comparison site and a useful way to get multiple offers.
As part of our research, we consulted with experts on mortgage lending to learn more about the application process, what you need to apply and how you can best position yourself to get approved with a good rate.
Interest rates and home prices are subject to a lot of external factors beyond the control of even these lenders. With that in mind, we try to compare them on factors that remain stable, including application requirements, customer service and any legal actions taken against them.
Which banks are the best mortgage refinance lenders?
As much as we are here to tell you our top refinance mortgage picks, the best mortgage refinance lender for you will depend on several factors, such as location, budget and whether you like to deal with loan officers in person or are comfortable conducting all your transactions online or by phone.
Big banks offer many types of loans and are likely to continue servicing your loan rather than sell it off to another company. They’re a good option if you like the convenience of having your checking account and mortgage in the same place. Some banks even offer certain discounts or credit card points for customers who take out mortgages with them.
On the other hand, a small local lender could have more familiarity with real estate in the area, and its loan officers might have more flexibility to cut deals on rates and fees. Online-only lenders like SoFi, meanwhile, have low overhead costs, which could translate to better rates and lower fees for you.
The bottom line is shopping around is key, and you should aim to get a quote from at least three lenders to see which can provide the best loan for your needs.
When should you refinance your mortgage?
When you should refinance your mortgage is likely to come down to a number of reasons.
The obvious trigger to seek out the best refinance mortgage companies is the highly attractive mortgage rates that are on offer right now, and how they compare to the mortgage rate you are paying on your current deal. According to Freddie Mac, the average rate on a 30-year mortgage has recently been hovering around its record low of 3.29%, whereas typical rates were often over 4.1% just a year ago. With Lending Tree research showing that refinancing a home loan taken out as recently as early 2019 could now result in a saving of $60 a month per $100,000 borrowed, the potential cost savings are significant.
That said, it is important to also check the terms of your current mortgage to see if there is a penalty for leaving the deal. Some mortgages charge a fee for paying off a loan early in the first few years of the mortgage, so any costs that might arise from this need to be considered when working out whether moving to the best refinance lender is worth your while.
On a similar theme, refinancing a mortgage will ultimately only be worth it if you intend to stay in your current house for a while. This is because of the closing costs that home movers are required to pay, including for the mortgage application, lender processing costs, appraisals, and so on.
Others might consider refinancing their mortgage in order to shorten the length of their mortgage plan. Refinancing from a mortgage with a 30 year term to one of 15 years would see you own your house a whole lot sooner and likely save money on interest payments at the same time. However, as such a move means you'll be making higher monthly payments, it is an option that should only be taken if you're certain your finances can take the strain.
Consolidating debt is another reason many people look to refinance their mortgage, and involves borrowing against the equity in your home to raise enough money to pay off the debts that you owe. If you’re paying high interest rates on debts held on perhaps credit cards, auto loans and student loans, it could be worth consolidating it all down into a mortgage loan, if the monthly payment works out less than the combined total of the individual payments that you’re making.
Using some of the home equity that has built up to pay for home improvements is another common reason that Americans look to refinance their mortgage. If moving is not on the agenda, making the most of your current home is a must, and could drive up the value of your property in the process.
Is now a good time to refinance your mortgage?
Whether now is a good time to approach the best refinance mortgage lenders will depend on your current circumstances and perhaps even what you think the future might hold.
Anyone looking to refinance right now will need to make sure that they are in a good position to qualify – and this is where problems may arise. Unfortunately, mortgages have become harder to secure, just as interest rates have fallen back towards record lows.
The coronavirus pandemic has put record numbers of Americans out of work and left millions more fearful for their jobs going forward – and understandably lenders are unlikely to view unemployment benefits as the steady source of income required to approve an application for mortgage refinance.
Another prime consideration will be your credit score, yet circumstances again unfortunately mean that many people will be struggling to service their debts at present, and seeing their rating take a hit as a result. This is also important because the lowest rates – and therefore the ones that could make a real difference to you financially – are only offered to those with the best credit. To secure one of the best rates, you will usually need a “very good” credit score or better, so a rating above 740.
The best credit report services can help you keep tabs on your credit score, while there a number of ways to quickly improve it if it’s not quite high enough, such as paying off credit card debt and fixing errors on your credit reports. If this doesn’t work, the best credit repair services might be worth a look.
That said, if you are in the fortunate position of retaining steady and secure employment, have a decent credit score, and have good reason to refinance your mortgage, the best refinance mortgage companies will be wanting to hear from you. The wait for your application to be approved may be a little longer than usual - applications for refinance mortgages jumped 79% in March, putting lenders under pressure to keep up - but it will almost certainly be time well spent.
Time to try a FICO score with a difference?
If you believe that a traditional credit score fails to provide the best refinance mortgage companies with the full picture about you, UltraFICO differs from standard FICO scores in that it takes banking activity into account – traditional credit scores only look at debt.
The rationale behind UltraFICO is that by looking at checking and savings activity, lenders can make loans to people who have a short credit history or those recovering from a period of financial distress.
UltraFICO will look at your banking activity, including how frequently you pay bills, and whether you maintain a positive balance and avoid overdrafting. UltraFICO also looks at how long you’ve maintained a bank account. If you have good savings habits, but a thin credit history, resulting in a score that’s too low for lenders to be comfortable with, you may be able to use UltraFICO to get approval.
UltraFICO is geared toward people unlikely to be approved using more traditional credit scores. This can increase the likelihood of being approved for a mortgage, personal loan or credit card, though it's unclear if using UltraFICO will affect the rates of the loan. What UltraFICO definitely doesn't do is affect your FICO credit score in any way, and does not become part of your credit report.