The best mortgage companies for refinancing can help you find the perfect refinance mortgage loan for your requirements. Here’s our list of the best lenders:
Refinancing, or “refi” for short, is the process of paying off an existing loan and replacing it with a new one with better terms.
Refinancing your mortgage is often one of the best single strategies to improve your overall financial situation.
Think about it: not only do you have an opportunity to lower your interest rate and monthly payment, but often to reduce the term of your mortgage as well.
What is Mortgage Refinancing?
Mortgage refinancing is taking out a new loan to pay off an existing mortgage. The new loan may have different terms and conditions, such as a lower interest rate, a different loan duration, or a change in the type of mortgage (e.g. from a fixed-rate mortgage to an adjustable-rate mortgage).
The primary motivation for most people who refinance their mortgage is to lower their monthly payments, but it can also be used to access equity or consolidate debt.
Refinancing requires a comprehensive review of the borrower’s financial situation and credit history, as well as an appraisal of the property being used as collateral.
It is important to carefully consider the costs and benefits of refinancing, such as closing costs and the impact on the overall cost of the loan, before making a decision.
How does Refinancing Work?
When you refinancing, you take out a new mortgage loan to pay off and close the old one. The parameters of the new refinanced loan will determine your new monthly payments, loan terms, and interest rates.
For example, if you refinance to a 30-year mortgage, it doesn’t matter how many years you paid on your original loan — your payment cycle with the new loan will start over and continue for 30 years.
Or if you owed $400 each month for private mortgage insurance (PMI) premiums on your initial loan, but your refinance does not include PMI, then amounts you had previously paid every month toward PMI would not be included.
Why Refinance a Mortgage?
Here are the common reasons to refinance:
- Reduce monthly payment
- Reduce total interest paid
- Shorten the length of the loan
- Change rate type (for example, from adjustable rate to fixed rate)
- Draw cash out to pay for other expenses or debts
- Cancel mortgage insurance premiums
Quick look: Best Mortgage Companies for Refinancing
Here are the 7 Best Mortgage Companies for Refinancing in 2023:
- NBKC – Best Online Bank
- Rocket Mortgage – Best Online Refinance Experience
- Better – Best for Fast Closing Time
- LenderFi – Best Online Lender
- Bank of America – Best Bank
- AmeriSave Mortgage – Best for Customer Service
- Alliant Credit Union – Best Credit Union
NBKC – Best Online Bank
NBKC business checking is a great option for budget-conscious small-business owners and those looking for a straightforward account to manage their finances online.
This free business checking account has no monthly maintenance fees and almost no incidental costs. Plus, unlimited fee-free cash deposits via compatible MoneyPass ATMs—a rare feature for an online business checking account.
NBKC also offers a range of add-on business solutions — including a free business savings account that can be opened in tandem with its business checking account — that allow you to customize your banking experience.
As an FDIC-insured institution, NBKC provides its banking services directly, unlike some online business checking account competitors.
Although both the business checking account and Money Market savings account are online-based (as well as the NBKC personal banking products), the bank does have four branch locations—two in Kansas and two in Missouri — and offers business financing to local customers.
Pros and Cons
- Offers government-backed loans and some harder-to-find products, such as construction loans and specialty mortgages for pilots.
- Offers low rates and fees compared with other lenders, according to the latest federal data.
- Displays customized rates, with fee estimates, without requiring contact information.
- HELOCs and construction-to-permanent loans are available only in the Kansas City metro area.
Rocket Mortgage – Best Online Refinance Experience
Rocket Mortgage is a leading online mortgage lender in the U.S., closing $351 billion in loans in 2021. Headquartered in Detroit, Rocket parent Quicken Loans was founded in 1985 by Dan Gilbert, who today serves as chairman.
The lender pioneered the first all-online mortgage application. With Rocket, eligible borrowers can lock their rate for up to 90 days and get prequalified or verified approval letters seamlessly to help in their house-hunting efforts.
Pros and Cons
- Rated best mortgage servicer by JD Power
- Largest mortgage originator in 2022
- Streamlined online application process with eClosing
- Features a mortgage refinance rate calculator
- There is no in-person service, but you may reach out to an affiliated broker
Better – Best for Fast Closing Time
Better, also known as Better Mortgage, is a direct online lender established in 2016 and provides a completely online process where rates, loan preapprovals, and resources are available 24/7.
The lender offers a variety of mortgage options, including conventional and jumbo fixed-rate and adjustable-rate mortgages and bridge loans.
The lender also offers rate-and-term and cash-out refinancing and a first-time homebuyer program. You’ll be able to secure a preapproval in as little as three minutes and can close a mortgage in as few as 21 days, although 30 to 45 days for a purchase is typical.
Notably, borrowers who are also Chime customers can currently save $500 on closing costs when getting a mortgage with the lender, and some American Express cardholders can get up to $6,000 credit to their statement. For both promotions, you’ll need to meet certain parameters to qualify.
Pros and Cons
- Fast online process, with competitor price-match program
- No origination, application, or underwriting fees
- Smart tech automatically looks for and applies eligible discounts
- Online-only, no brick-and-mortar branches
- Limited refinance loan type options
LenderFi – Best Online Lender
LenderFi owns the best online lender title with no lender fees, instant online approval, and the option to talk to a loan consultant by phone.
It offers many loan options for purchases and refinancing, including conventional FHA loans. It doesn’t offer jumbo, VA, or USDA loans as of 2023 but it plans to in the future.
LenderFi offers products for single-family homes, multi-family homes, condominiums, co-ops, townhouses, manufactured homes, and planned-unit developments.
LenderFi can close loans in as little as two weeks. It offers rate insurance if LenderFi rates drop as little as 0.25% from your current rate. LenderFi will rewrite your loan at no additional cost for the life of the loan.
The qualifying factor is that you must make at least six current payments and this excludes prepaid interest.
LenderFi has been in business since 2006 and it offers competitive fees for a variety of loan options nationwide except in Hawaii, Missouri, Nevada, New York, and Utah.
This is a non-bank lender that cuts costs by using an interactive online system to streamline expenses and eliminate unnecessary fees.
Based in Florida, LenderFi can process loans from origination to closing using its own finances so customers deal solely with one company from beginning to end.
Pros and Cons
- Customers can close on their loans within two weeks of applying
- No lender fees
- Keeps mortgage rates current for online application
- Not available in Hawaii, Missouri, Nevada, New York, and Utah
- No home equity loans
- It doesn’t offer information on minimum borrowing requirements without applying
Bank of America – Best Bank
Bank of America is our best bank for refinancing because it can refinance many loan types and it offers online, phone, and branch services.
Interest on refinancing for a 30-year fixed-rate loan is 3.250% and 2.500% for a 15-year fixed-rate loan. A 5/1 ARM has an interest rate of 2.625%.
Current BOA customers can qualify for a reduction of up to $600 in closing fees when they refinance. The bank also offers online mortgage applications to get pre-qualified, pre-approved, and lock in your rate through its website or mobile app.
Those seeking to refinance into a BOA loan must have a credit score of at least 620 for a conventional loan, 640 for an FHA loan, and 660 for a VA loan.
Bank of America is a traditional bank option offered in all 50 states. Interest rates start at 2.500% and can go up to 3.250%.
This is a traditional bank, so customers can expect to produce much more personal documentation than with alternative lenders.
This can include employment information, tax returns, and other papers related to your current property.
Bank of America is one of the world’s largest banks with an established reputation for stability.
Pros and Cons
- Interest rates run from 2.625% for a 5/1 ARM to 3.250% for a 30-year fixed loan
- Preferred Reward clients can qualify for up to a $600 reduction in mortgage origination fees
- Rate transparency
- A minimum credit score applies but is not disclosed.
- Can’t refinance your USDA mortgage?
- Closing fees are on the higher end
AmeriSave Mortgage – Best for Customer Service
AmeriSave offers a wide selection of home loans and home refinancing options. New home loans include conventional loans, jumbo loans, Fannie Mae 3% down payment loans (specifically for first-time homebuyers), Federal Housing Administration loans, U.S. Department of Veterans Affairs loans, and U.S. Department of Agriculture loans.
Homebuyers can also choose between fixed-rate and adjustable-rate mortgages. For fixed-rate loans, the most common terms are 15- and 30-year mortgages, but AmeriSave also offers 10-, 20- and 25-year loans.
With adjustable-rate mortgages, the initial fixed-rate period lasts for five, seven, or 10 years. After that, the interest rate adjusts annually.
AmeriSave offers two basic refinance options: rate and term refinance, where you lower your current interest rate and change your mortgage term length, and cash-out refinance, where you use the accrued value of your home to pay off debts or make home improvements. AmeriSave also offers mortgage refinancing with FHA, VA, and USDA loans.
AmeriSave also offers home equity lines of credit.
Pros and Cons
- Customers can search interest rates and loan options without an obligation
- No hidden fees
- Quotes are accurate and aren’t estimates
- You must have an exterior and interior appraisal done
- Manufactured or mobile homes are not allowed
- Customers can’t change jobs or make a large purchase during the loan process
Alliant Credit Union – Best Credit Union
Alliant Credit Union
Alliant Credit Union offers CDs, which it refers to as “certificates,” with terms ranging from 12 to 60 months. All CDs require a minimum deposit of $1,000, which is not unreasonable for a CD.
Alliant Credit Union offers a Dividend Withdrawal option that lets you receive an interest payment every month, rather than waiting until the end of the CD term to collect your earnings.
Not all banks offer this, so Alliant could be an option if you are interested in receiving your earnings upfront.
Its CD rates are on par with the top online banks. And you can choose from a number of unusual terms, like 17 or 35 months if you choose.
Alliant Credit Union has received mixed reviews from consumers. While it has an A+ rating with the Better Business Bureau, customer reviews come in at less than 2 out of 5 stars on that site. Plus, Alliant only garners a 2.3 out of 5 from Trustpilot.
It’s worth noting that neither site has that many reviews, and there aren’t many other third-party sites with customer reviews to give us more insight into the typical banking experience with Alliant Credit Union.
Customer ratings are something to keep in mind when comparing your options, but it might not concern you if you rarely contact your current bank.
Alliant Credit Union offers all the online and mobile banking tools you’re used to, so it’s pretty easy to manage most of your money without needing to contact the credit union.
Alliant Credit Union does not offer much in the way of relationship benefits, but this is unsurprising in an online credit union.
Relationship benefits are more common among brick-and-mortar banks that often charge fees for their accounts and waive them for customers who sign up for multiple services. However, online banks rarely charge maintenance fees in the first place.
Other types of relationship benefits include sign-up bonuses and higher APYs on deposit accounts, but Alliant Credit Union’s rates far outstrip what most brick-and-mortar banks offer.
Pros and Cons
- Will refinance non-warrantable condos
- Shop rates online
- Online applications
- Doesn’t refinance government-backed mortgages
- Higher fees than other lenders on our list
- No branches for in-person consults
What are the Requirements for a Mortgage Refinance?
There are three primary factors lenders consider when reviewing mortgage refinance applications: credit score, debt-to-income ratio, and loan-to-value ratio (LTV).
- A low debt-to-income (DTI) ratio: You need a DTI of up to 43% for conventional loans or less than 50% for an FHA mortgage to refinance, according to the Consumer Financial Protection Bureau (CFPB). Use our DTI ratio calculator to figure out where you stand.
- A healthy FICO credit score: Most mortgage refinance lenders require a minimum credit score requirement of 620, but you’ll get the best rates for a score that’s 740 or higher.
- A Loan-to-value ratio (LTV) of 20% or more: LTV is the amount of the loan you want to take out divided by the appraised value of your home.
You will also have to submit additional paperwork related to your income and the property you are refinancing.
Documentation required to apply for a mortgage refinance:
- Proof of income
- Proof of insurance
- Credit information
- Statement of debt
- Statement of assets
- Additional documents
Best Mortgage Companies for Refinancing: FAQs
Q: Why is it a good idea to refinance my mortgage?
It’s a good idea to refinance your mortgage if doing so can help improve your finances. Refinancing could lower your interest rate. This can reduce borrowing costs. It could allow you to lower your monthly payment and so provide more flexibility.
It might also make it feasible to access your home equity; for instance, you might want to withdraw money to pay for house improvements. Or it could help you change the terms of your current loan to one that’s a better fit.
Q: How much does it cost to refinance a mortgage?
Refinancing closing costs can run anywhere from 2% to 5% of the loan amount. There are no-closing-cost refinance options, but they generally involve rolling closing costs into the principal balance, which will likely cost more in the long run. The bottom line is that refinancing can be very financially advantageous, but it’s rarely free.
Q: Am I Eligible to Refinance My Home?
Most certainly! The top-rated lender on this page, New American Funding, offers refinancing for a wide variety of users with different incomes, credit scores, and mortgage loan types.
Q: What Interest Rate Can I get?
Your home mortgage refinance rate will depend largely on your current loan balance, credit score, and income. Click “GET RATES” to get your unique interest rate of 100% online.
Q: What’s the difference between an adjustable and a fixed-rate mortgage?
A fixed-rate mortgage has the same interest rate for the life of the loan. Adjustable-rate mortgages (ARMs) have a low fixed rate for an initial period, often one year. The terms of your loan indicate how and when the rate will adjust. For example, a 5/1 ARM has a low fixed rate for five years and then changes every year. It can go up or down.
Refinancing isn’t right for everyone, so it depends on your situation. It largely depends on how much it costs to refinance and how long you plan to stay in your home.
One common misconception is that refinancing is free or that it costs the same with every lender. And this isn’t the case at all; borrowers should expect closing costs in the thousands when refinancing.
To be sure, this can still be well worth it if you’re planning to stay in your home long enough so that the savings outweigh the cost.
Here’s an example: Let’s say that you can lower your monthly mortgage payment by $50 if you refinance, but it will cost you $2,000 in various fees to get the loan. Dividing $2,000 by $50 shows that you would need to stay in the home for at least 40 months for refinancing to be worthwhile.
To determine if refinancing is the right decision for you, check out our guide on whether or not refinancing is worth it.
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