Refinancing can be a lifesaver if spiking adjustable mortgage rates are making your payments unmanageable. It can also help you get needed cash by turning your equity into money you can use for emergencies, like replacing a broken-down car. Or you can just take advantage of low interest rates to help you save money each month.
But deciding to refinance is only half the battle. Choosing the best mortgage refinance company for your situation ensures you get the best deal available from a company you’re happy to work with long term.
The Best Mortgage Refinance Companies
Our pick for the best mortgage refinancing company is
Rocket Mortgage. It makes the process easy by syncing with your financial accounts and can connect you with a local mortgage broker if you want in-person help.
The other companies on this list excel in a few different areas, such as customer service or low rates. So compare the features carefully to find out which one’s right for you.
Motley Fool Stock Advisor recommendations have an
average return of 618%. For $79 (or just $1.52 per week), join more than 1 million members and don’t miss their upcoming stock picks. 30 day money-back guarantee. Sign Up Now
Best Overall: Rocket Mortgage
Rocket Mortgage is well-reviewed and offers flexible loans with a streamlined application process.
You can complete almost the entire process online. The site links with your financial accounts to gather the necessary details. So you don’t have to gather documents like pay stubs and bank statements to submit to your lender.
If you’re the kind of person who wants a helping hand, Rocket Mortgage can connect you with a local mortgage broker. They can help you shop around and guide you to the best refinancing loan for your needs.
Rocket Mortgage helps you refinance loans for multiple property types, including:
Borrowers also have the option to choose from 15- and 30-year loans. Rates for each are transparent, making it easy to comparison-shop.
- Mortgage calculator that helps you determine your monthly payment after refinancing
- Learning center with valuable insight on mortgages and refinancing
Best for Comparison-Shopping: Credible
Credible is another loan refinancing company that offers a streamlined application process.
With Credible, you can get preapproval in just a few minutes without hurting your credit score. You can link your financial accounts so the site can gather the information it needs automatically, saving you the time of manually finding and uploading paperwork.
One major benefit is that it helps you compare mortgage refinance loans from multiple mortgage lenders privately. Many loan-comparison engines sell your data, meaning you start getting tons of spam emails and calls from lending companies. Working with Credible saves you that headache.
Depending on the lender you work with, you have options for almost every type of loan. But the site focuses on fixed-rate conventional and jumbo loans. It also offers Federal Housing Administration-backed FHA loans and VA loans from the U.S. Department of Veterans Affairs.
- Human loan officers
- Other types of loans and refinancing available
- Cash-out refinances available
- Dedicated support team
Best for Interest-Only Loans: CIT Bank
CIT Bank offers a unique class of mortgages: interest-only loans. These loans give you the absolute lowest monthly payment because you’re only paying for the interest that accrues. The downside of this is that you’ll never pay down the principal of your debt.
The only way to build equity with this type of loan is if your home gains value. You’ll also never own your home free and clear unless you refinance under another mortgage that includes principal payments or decide to make additional payments toward principal.
These types of loans are useful if you don’t plan to stay in a home long term, but traditional buyers looking for a permanent living situation should avoid them. They can also be harder to qualify for, especially if you don’t have other assets and good credit.
CIT also offers traditional, fixed-rate loans with flexible terms ranging from 10 to 30 years, making it an option for typical homebuyers. Most lenders only offer 15- and 30-year terms.
- A lower rate if you also have a bank account with CIT
- Cash back on closing for banking customers
- Homeowner assistance and foreclosure protection programs
Best for Educational Materials: LendingTree
Like Credible, LendingTree makes it easy for borrowers to compare mortgage refinancing offers from multiple lenders. When you enter information like your home’s value, loan balance, and credit score, LendingTree matches you with lenders who like to work with borrowers like you.
One perk of LendingTree is that it’s very transparent with the loan terms its partners typically offer. The first thing on its loan refinancing page is a list of lenders and the interest rates and monthly payments they offer for typical loans.
LendingTree helps borrowers get both fixed-rate and adjustable-rate loans and supports programs like FHA loans and VA loans.
What sets LendingTree apart is its vast selection of articles homeowners can peruse to learn more about home loans and the refinancing process. These articles can help you learn more about what to look for when refinancing a mortgage.
- Refinance calculators help you calculate your monthly payment
- Check and monitor your credit score and get suggestions on how to improve it
- Ratings and reviews of lenders from other LendingTree customers
Best for Cashing Out Equity: Figure.com
Figure.com is a lender that specializes in helping borrowers tap their home equity. It offers home equity lines of credit and refinancing options to cash out as much as $500,000. It currently doesn’t offer conventional home loans. However, it supports other loan types, like jumbo mortgage loan refinancing.
One major benefit of refinancing with Figure is its speedy digital application process. You can apply for your refinance quickly through your phone or a computer.
- Lock in your rate online at any time
- Fintech banking services available
- Personal loans available
- Unique investments for accredited investors
Best for Service Members: USAA
USAA is well-known as a financial institution for military members. Like a credit union, USAA restricts its membership. You’re only eligible to join USAA if you are:
- An active member of the military, National Guard, or Reserves
- A retired veteran
- And honorably discharged service member
- An officer candidate in a commissioning program
- An immediate family member of a USAA member
USAA offers mortgage options unique to military members, such as VA loans, which allow you to get a loan with no down payment.
It also offers conventional mortgages, though it doesn’t support USDA loans, which the U.S. Department of Agriculture backs to promote rural living and development.
What makes USAA stand out is its strong customer service. It also has reasonable lender fees, such as origination fees, so you won’t have to pay as much when you refinance. It’s also transparent about rates and fees.
- Refinance up to 100% of your home’s value
- Knowledge base featuring home purchasing advice specifically for military members
- Access to a free online budgeting tool
- Online financial account and spending trackers
Methodology: How We Select the Best Mortgage Refinance Companies
Getting a mortgage is a complicated process, with many different factors influencing the suitability of a specific mortgage company for your needs. That said, we used four key metrics to determine who made the list of the best mortgage refinancing companies.
The interest rate is the most important factor to look at when refinancing. The rate determines the overall cost of your loan as well as the monthly mortgage payment. Lower interest rates result in less expensive loans.
Lenders that offer both variable- and fixed-rate mortgages also score higher in this category because they give borrowers more flexibility to choose the loan that’s right for them.
A lender needs to offer competitive rates to make the list but may still be acceptable if they make up for it in other ways.
Ability to Comparison-Shop
Some of the sites on this list make it very easy for borrowers to compare offers from multiple lenders. Some lenders are also upfront about the loan fees and interest rates you can expect, making it easy to compare them to competitors.
The easier a site makes it to compare offers from different lenders, the better it is for borrowers. Some lenders make it hard to get a rate quote. That can make some borrowers fall prey to the sunk cost fallacy. They feel they have to go with that lender because of all the work they put in.
First-time homebuyers often struggle with the length and complexity of the application process. Getting a mortgage takes a long time.
Refinancing is no different, but many lenders have taken steps to make it easier to apply for your new mortgage.
Lenders who have a streamlined online application process where you can link your financial accounts to reduce the need to provide physical credit card or bank statements and pay stubs have a leg up on the competition.
Types of Mortgages Available
Even though mortgages are all designed to help people buy real estate, there are many different types of mortgage loans out there. The more refinance options that a lender offers, the better.
For example, a lender that refinances FHA loans, jumbo loans, and USDA loans on top of conventional mortgages is better than one that only does conventional lending.
It’s also good to work with a lender that has other loan products, like home equity loans or lines of credit, because you can stick with the same lender if you need a new loan in the future.
Alternative loan types that are unavailable from most lenders, like CIT Bank’s interest-only loans, are also beneficial for some customers, such as those planning to live in a home for a short period.
Mortgage Refinance Company FAQS (Frequently Asked Questions)
Before you consider refinancing your mortgage, it’s crucial you understand these essential facts about the process.
What Happens to Your Existing Mortgage When You Refinance?
When you refinance your mortgage, you’re effectively replacing your old loan with a new one. You use the proceeds from your refinance loan to pay off the balance of the original.
If you’re doing a cash-out refinance, whatever’s left after paying the balance of your loan goes to your bank account. You can then use that extra cash for something like paying for home improvements.
What Are the Pitfalls When Refinancing?
Ensure you’re refinancing your loan for the right reason. You can refinance to reduce your monthly payment or convert to a longer- or shorter-term loan.
Refinancing replaces your old loan with a new one, so there’s a chance your new loan will have a higher interest rate. Try to avoid extending your loan term or raising your interest rate since that costs you money in the long run.
Read our article on whether you should refinance your mortgage for more information.
Why Does My Principal Go Up When Refinancing?
Getting a mortgage can involve a lot of fees and closing costs. You have to pay additional costs like appraisals and origination fees. Sometimes, lenders put these charges into the balance of your new loan, especially if you get a no-closing-cost loan.
For example, if your closing costs are $3,000 and you’re refinancing a $100,000 loan, your new balance is $103,000, as those fees get added to your loan principal.
Additionally, interest accrues on your mortgage daily, so any interest accrued between your last payment and the time you refinance capitalizes (gets added to the balance of your new mortgage) unless you pay those charges when closing on the loan.
What Do I Need to Qualify for a Refinance?
Qualifying for a mortgage refinance is just like qualifying for a mortgage. You need to have strong credit, a low debt-to-income ratio, and proof you have the income to support the payments on your new loan.
You also need to maintain a reasonable loan-to-value ratio. If you’re underwater on your loan due to decreased home values, you’ll struggle to find a willing lender.
How to Choose the Best Mortgage Refinance Company
Choosing the best mortgage refinance company means finding the lender that offers the type of loan you’re looking for and comparing rates and fees to ensure you get the best deal possible.
Before you apply, check your credit and take steps to improve your odds of approval. The more attractive you look as a borrower, the lower the interest rate you can secure for your new loan.
Best Company to Refinance Investment Property
Posted by: us.dujuz.com