Best Mortgage Refinance Companies for 2021
In the current economy, becoming a homeowner without taking out a mortgage is almost impossible, but if you manage to lock in low rates and reasonable monthly payments, it’s all worth it in the end. Unfortunately, many aren’t that lucky and end up struggling to keep their head above water.
That’s why we’d like to present you with a few life jackets or rather a list of the best mortgage refinance companies because drowning is an experience we’d want you to avoid.
4 Best Mortgage Refinance Lenders
Quicken Loans is the largest mortgage lender in the US. The Michigan-based company has been ranked highest by J.D. Power for Client Satisfaction in Mortgage Origination for 11 consecutive years, and today, it sealed the top spot on our list of the best refinance lenders. Read Review
- •Wide variety of loan products
- •Expert mortgage advisors
- •Award-winning company
Axos Bank is an online-only financial institution that provides an innovative approach to banking thanks to its mixture of advanced digital tools and human insight. Customers are often drawn to this mortgage lender because of its discount offers and low mortgage refinance rates. Read Review
- •Annualized cashback credit
- •No lender fee
- •Super Jumbo loans
Over the span of 25 years, LendingTree became one of the most popular online marketplaces. This business platform is perfect for those that would like to avoid the hassle of having to visit dozens of different websites in order to compare multiple mortgage refinance options. Read Review
- •Financial health mobile app
- •Free to use
- •500+ lending partners
Better.com truly is better than most when it comes to providing fast and convenient services. What it lacks in loan types, it makes up for in affordability, seeing as the company charges few fees and usually offers very competitive refinancing rates. Read Review
- •Fast pre-approval
- •100% online application
- •No origination fee
How We Evaluate Mortgage Refinance Companies - Review Methodology
The true extent of the damage caused to the global economy by the coronavirus pandemic is yet to be fully comprehended, but for now, believe it or not, there is a silver lining. Due to the steps taken by the Federal Reserve, refinance mortgage rates are currently at an all-time low.
With many rushing to seize this opportunity, an important question arises: how do you pick the right lender? Seeing as the majority are quite similar, it can be a challenging task. To assist you in making the best choice, we’ve written down the criteria we used while evaluating these companies.
Lenders often provide several loan types, which can be divided into those guaranteed or insured by government agencies (government-backed) and those that aren’t, called conventional loans.
The three most common government-backed loan programs that you’ll find at home refinance companies are:
- Federal Housing Administration (FHA) loans
- The United States Department of Agriculture (USDA) loans
- The U.S. Department of Veterans Affairs (VA) loans
As for the conventional loans, you’ll usually encounter the following:
- Fixed-rate loans
- Adjustable-rate loans
- Jumbo loans
- Portfolio loans
- Subprime loans
It’s impossible for us to recommend one loan over another as there are far too many varying factors to consider such as a person’s credit score, amount of outstanding debt, DTI ratio, and the size of their current mortgage. That’s why we evaluated refinance companies based on the number of refinancing options they have and presented you with those that offer the largest assortments.
For refinancing to make sense, the loan you take out has to be more affordable than the one you already have. Keep in mind that although it’s highly relevant, looking at interest rates in order to determine when to refinance is more useful than using them to compare lenders.
Mortgage rates change slightly during the five-day workweek, but they don’t differ much from lender to lender. Therefore, we focused more of our attention on evaluating the fees and penalties associated with your potential home mortgage refinance loan.
Quality of Service
Quality of service is nearly as important as pricing. Refinancing can get complicated so you need a reliable and efficient company on your side. To find one, we examined three main factors.
Application process: It should be as straight-forward as possible. Filling out frustratingly complicated or unclear forms is an avoidable hindrance.
Speed: Sometimes refinancing isn’t only a matter of saving a few dollars. To some, it’s a matter of necessity, meaning that they don’t have time to waste. Therefore, the speed at which a lender can approve and fund your loan can be of vital importance for selecting the best refinance company.
Customer care: With all the paperwork that refinancing entails, having access to a team of experts that can answer your questions quickly and accurately can be of great value.
Once you’ve located a company that fulfills the aforementioned criteria and a loan that works for you, it’s time to make sure you can qualify for it. We kept our eyes open for companies that don’t have unrealistic expectations about potential clients.
On Official Website
- • Wide variety of loan products
- • Expert mortgage advisors
- • Award-winning company
When talking about the best mortgage refinance companies, one can’t help but mention Quicken Loans. The company has been in business for over three decades, and throughout that time, it never stopped improving.
Quicken offers an abundance of loan options to choose from with either adjustable or fixed rates.
You can use Quicken’s adjustable-rate loans to take some pressure off yourself during the next five, seven, or 10 years. Throughout that period, your rate will be lower than those of other loan types. After that time, your refinance rate won’t increase more than 5% from the original rate.
If you’d like to lock-in your rate while you pay off your loan in 15 or 30 years, you should consider Quicken’s fixed-rate loans. These will let you refinance your home for up to 97% of its value. For larger amounts up to $2,000,000, check out Quicken’s jumbo offer.
Before moving on, we should also mention Quicken’s unique YOURgage product that lets you customize your loan term - simply calculate how much you can afford to pay monthly and select any number of years from eight to 29.
Some of the refinance fees that you’ll encounter as a Quicken client are application origination, credit report, title search, home appraisal, and flood certification fees. They range from $25 to $900, which is a bit higher than average. To sum it all up, you should expect the cost of refinancing with Quicken to approximately equal 2 – 3% of your borrowed amount.
Quality of Service
The very first thing we noticed when we visited the Quicken website was that every piece of information was readily available and easy to understand, which is why we weren’t even slightly surprised when the same turned out to be true for the application procedure.
This refinance mortgage lender is known for its exceptional customer service, so you might want to take advantage of that and get some advice from one of its knowledgeable mortgage bankers. Alternatively, you can just go straight to filling out the simple online form.
Getting your new mortgage approved can take about 30 to 60 days. While you wait, you can follow the progress of your application by logging into your personal account. Receiving your funds shouldn’t take longer than two hours.
To obtain a refinance home loan from Quicken, you’ll need a credit score of at least 580 to qualify for an FHA loan and 620 or more for all other loans as well as a debt-to-income ratio that doesn’t exceed 50%.
If you want to both refinance and take cash out, you should leave at least 15% – 20% of your equity in your home. On the other hand, if your aim is to just lower your rate or change your term, only 3% or 3.5% of your equity will be enough.
Reasons to Apply:
- Transparent pricing
- Real-time application tracking
- Highly customizable terms
On Official Website
- • Annualized cashback credit
- • No lender fee
- • Super Jumbo loans
If you’re worried about being overwhelmed with refinancing fees, you should consider Axos Bank. Launched in 2000, this company is one of the first online-only banks in the world.
Axos offers conforming (up to $510,400) and non-conforming (exceeding $510,400) loans, which include interest-only mortgages as well as jumbo and super jumbo loan amounts. Portfolio loans are also available, but it’s very unlikely that you’ll use them for refinancing as they tend to include somewhat high monthly payments and interest rates.
Although Axos may not have a completely customizable loan package as Quicken does, it still provides a wide selection of both fixed-rate and adjustable-rate terms. Borrowers can have their refinance interest rates remain the same for 10, 15, 20, or 30 years. Those who prefer to have the rate change during the loan’s tenor can choose to have their rate set for the first three, five, seven, or 10 years.
Axos also extends an interest-only loan that allows you to only pay the interest on the loan during its initial period, which in this case can be either five or 10 years. However, unless you’re a property investor looking to take advantage of tax benefits, you won’t find this option particularly useful.
What sets Axos apart from other refinance lenders are its super jumbo loans that can amount to more than $25 million.
Axos charges a lender fee of $995 that can be avoided or reduced if you have an existing Axos Bank checking account or open one during your application process. Your loan amount will have to be $250,000 or more for the fee to be waived, and it’ll be reduced by $200 if it’s less than that.
By making payments through the bank’s Total Loan Rewards checking account, you’ll get the opportunity to earn 3% annualized cashback, which is calculated using your principal and interest payments.
Quality of Service
Customers can check their refinance rates in just a few minutes, and if they like what they see, they can choose to have a mortgage consultant walk them through the application process. However, the company's customer support options are limited.
Axos does its best to close its mortgages within 30 days but in certain situations, it may take a few days longer. Keep in mind that non-traditional mortgages, such as super jumbo loans are evaluated on a case-by-case basis. Therefore, there are no guarantees regarding the speed of approval.
Like most other home loan refinance companies, Axos has a minimum credit score requirement of 580 for FHA loans and 620 for other mortgage products. Regrettably, Axos isn’t very forthcoming when it comes to its DTI and LTV criteria.
Reasons to Apply:
- Variety of rate terms available
- Faster-than-average approval
- Consultant-assisted application
On Official Website
- • Financial health mobile app
- • Free to use
- • 500+ lending partners
Since it was founded in 1996, LendingTree has developed a comprehensive network of lenders. Today, it’s one of the largest online lending marketplaces in the US.
Aside from conventional fixed and adjustable-rate loans, LendingTree can also assist you in locating government-backed VA, FHA, and USDA loans. You’ll be able to find fixed 10, 15, 20, and 30-year refinance rates and adjustable five, seven, and 10-year refinance rates.
One of the main benefits of LendingTree is the fact that you aren’t limited to just one lender and are able to browse through numerous loan options. The streamlined-assist refinance loan, which is a USDA-type of loan, is designed for low to moderate-income borrowers who live in rural areas.
LendingTree doesn’t charge you for using its services. Any fees that you may be required to pay will be determined by the lender you choose. The estimated cost to refinance a mortgage is around 2% to 6% of the loan amount. You’ll probably be able to unearth a pretty good deal since competition drives down prices, and with more than 500 lending partners, it’s safe to say that LendingTree has plenty of it.
It’s important to note that LendingTree doesn’t associate with any lenders that ask for upfront fees in exchange for securing a loan.
Quality of Service
With so many lenders available through LendingTree, you might have some concerns about their reliability. But there is no need to worry as this platform partners with the best mortgage refinance companies around. Every lender is meticulously vetted in order to ensure your safety and that of your money.
LendingTree’s application process couldn’t be any easier since it essentially comes down to pressing buttons. First, you’ll be asked to select the type of property you’re planning on refinancing and if the property will be used as a primary, secondary or rental home. The next step is to indicate your refinancing goal and to enter your zip code. Then, you’ll need to estimate the value of your home, specify the remaining balance on your first mortgage, answer a few questions that are used to determine your creditworthiness, and you’re done.
The speed of approval and funding depends solely on your chosen home mortgage refinance lender, so make sure to review those details before you settle on a company.
Additionally, since a number of lenders will have your contact information, brace yourself for a barrage of emails and phone calls from multiple loan officers.
Through LendingTree, you can obtain an FHA loan with a credit score of just 500, but your maximum DTI ratio can’t be more than 43%, and your maximum LTV ratio should be around 97.75%. For a conventional rate-and-term refinance loan, you’ll need a score of at least 620, with a maximum LTV ratio of 97% and a DTI ratio that’s no higher than 50% (in some cases 45%).
Reasons to Apply:
- USDA loans available
- Extremely simple qualification process
- Lenient qualification criteria
On Official Website
- • Fast pre-approval
- • 100% online application
- • No origination fee
Better.com was launched in 2014, making it the youngest company on our list. But despite its brief history, it’s quickly becoming a recognizable brand among those on the lookout for budget-friendly mortgages.
Unlike the other top refinance lenders on our list, Better.com doesn’t currently offer government-backed loans. It used to provide FHA loans, but it was temporarily prevented from doing so because of the coronavirus pandemic.
You will, however, have the opportunity to take out a conventional loan with a 3% down payment or a jumbo loan with a 10% down payment and choose between 15, 20, and 30-year fixed-rate terms and five, seven, and 10-year adjustable-rate terms.
Costs are where Better.com truly shines. It doesn’t charge any lender fees, which include application, underwriting, and origination fees. But what truly sets it apart from the competition is its Better Price Guarantee.
Although Better.com already offers some of the lowest refinance rates on the market, it ensures its spot as the most affordable lender by encouraging its potential customers to send in loan estimates from other companies. If it can’t beat the competitor’s price by at least $100, Better.com will send you the $100 instead.
Better.com often issues discounts to people that apply for one of its loans through the websites of its partners. Another perk of obtaining a mortgage from this specific company is that you can purchase points in order to reduce your refinancing mortgage rates.
Quality of Service
It’ll take you around three minutes to complete the pre-approval process. Once you’re pre-approved, you’ll be presented with loan options that you’re eligible for along with an approximation of your monthly payments and APR.
If you decide to go forward with the procedure, you’ll be connected to a loan consultant, who can help you select one of the offers. After that, your loan estimate will be sent to you within three days. However, the lightning-fast service doesn’t end there, seeing as Better.com closes on mortgages in just three to six weeks.
Considering all that, it’s a shame that such a great loan refinance company doesn’t operate in all 50 states.
Better.com accepts borrowers with a credit score of 620, a DTI of up to 50%, and a LTV as high as 97%. For a more detailed explanation of the lender’s criteria, you can visit its website or contact one of its customer support agents.
Reasons to Apply:
- Better Price Guarantee
- Mortgage rate reduction points
- Fast pre-approvals and loan estimates
Fortunly’s Guide to Mortgage Refinancing
Some of you may be wondering if refinancing a mortgage is actually worth the hassle, and the truth is that there’s no right answer. Everyone has to assess their own financial situation and decide for themselves. However, we can lend a helping hand. Read our guide to learn more about the whys and whens of refinancing.
How does Refinancing Work?
Let’s start off by quickly clarifying what refinancing entails since it may sound like a complicated financial maneuver, but it’s far from it. In fact, it’s almost exactly the same as getting your first mortgage. You browse through the available loan options, pick one, apply for it, and once the underwriting process is done, you go to closing.
As you can see, there’s not much to it. The main challenge is doing all the calculations and figuring out what kind of refinance loan suits your needs. We suggest using a mortgage refinance calculator to make the entire process a lot faster. You’ll have to make a few educated guesses if you aren’t familiar with every interest rate and loan amount that the companies you’re considering offer.
There are several benefits to refinancing your home loan:
Better interest rate: This is one of the main reasons why people choose to refinance. Paying a lower interest rate can significantly reduce your monthly costs.
Predictability: Switching from an adjustable-rate mortgage to a fixed-rate loan can provide you with some much-needed stability.
Shorter term: Mortgage refinancing from a 30-year mortgage to a 15 or even 10-year loan can help you pay off your debt faster. Additionally, you can save money since interest rates on shorter loans tend to be notably lower.
Removing a name from a mortgage: The only way to get a person, for example, a co-signer or an ex-spouse, off a mortgage is by refinancing.
Consolidating debt: You can either combine two mortgages into one and rid yourself of two monthly payments, or you can use a cash-out refinance to borrow more than what you owe for your home and use the rest of the money to pay off other debts.
Canceled mortgage insurance: Refinancing is also used for canceling private mortgage insurance on government-backed loans thus eliminating the premium that’s calculated into your interest rate.
When to Refinance a Mortgage?
Refinancing is not an endeavor you should take lightly as there are plenty of accompanying costs. Usually, they are between 3% to 6% of your loan’s principal.
Take all the time you need to do your research, find the best refinance company, evaluate your creditworthiness, and most importantly assess your finances. You might come to the conclusion that the amount of money you can save is actually disregardable. Not to mention that homeowners who have already taken care of the majority of their principal shouldn’t complicate their lives by jumping into the process of taking out another mortgage.
That being said, refinancing can be a very clever move if you time it right. You should jump into action if you still have plenty of years left on your mortgage and you’ve seen the refinance loan rates drop significantly in the past several months.
Experts believe that mortgage rates will stabilize in 2021, but at the moment, they are still at an all-time low. The lowest recorded rate is 2.71% for 30-year fixed-rate loans.
Sticking with your current mortgage company might spare you the trouble of filling out new forms and sending in your documents all over again. However, your main concern should be finding the best mortgage refinance rates and lowest fees, which your lender might not have.
Some lenders offer mortgages with no closing costs, but that doesn’t mean that the closing costs disappear. Instead, you’ll be charged a higher interest rate during your loan’s tenor.
To choose a lender that meets all of your refinancing needs, you have to spend quite a bit of time evaluating a number of companies. You should especially pay attention to their pricing, loan types, qualification criteria, and overall service quality. Read our methodology for finding the best mortgage refinance companies for more details.