Best Mortgage Refinance Companies

Refinancing your mortgage can have huge benefits—it can help you save money, lower your monthly payments, eliminate private mortgage insurance (PMI), tap into your home equity, or remove a name from a loan that no longer needs to be there. 

No matter your reason for refinancing, the right loan provider can make the whole process much easier. To save you time, we’ve found the five best mortgage refinance companies you might like working with. Here’s an overview of our top picks. 

Reviews of the best refinance lenders

The LendEDU team found that SoFi, Rocket Mortgage, Quicken Loans, and Navy Federal Credit Union are the best mortgage refinance companies. But each is great for a different reason. Below, we’ll break down the pros, cons, and eligibility requirements of each lender, so you can find which mortgage provider might be best for you.

SoFi

Rocket Mortgage

Quicken Loans

Navy Federal

How does a mortgage refinance work?

When you refinance a mortgage, you get a new loan, which you then use to pay off your current mortgage. The refinancing process is similar to when you first got your mortgage: You’ll apply with a lender, provide information about your finances, and go through underwriting. The lender will review this information to determine your eligibility and rates. 

Once approved, you’ll close on the new loan, pay off your old mortgage, and start payments on the new one.

The goal is often to get better loan terms, but this isn’t always the case. You may want to refinance your mortgage for any of these reasons:  

• Interest rates are low. If rates have dropped since you first took out your mortgage, refinancing could help lower your rate and reduce your monthly payments.
• Your credit score has improved. If your credit has improved since you first got your mortgage, you may qualify for better rates and terms if you refinance.
• You want to change your loan term. You can refinance to shorten or lengthen it. A shorter term means higher monthly payments but less interest paid overall (terrific if you’re trying to become debt-free). A longer term means lower monthly payments but more interest over time (best if your budget is stretched too thin).
• You need to remove a name from a mortgage. You may need to refinance your mortgage if you’re going through a divorce or other changes in ownership and need to remove or add a name to your loan.
• You’d like to switch from an adjustable-rate to a fixed-rate mortgage. If you have an adjustable-rate mortgage (ARM) and want more predictable monthly payments, you can refinance to a fixed-rate mortgage.
• You’d like to do a cash-out refinance. If you’ve built up equity in your home, you can refinance for a higher amount than your current mortgage balance and get the difference in cash. You can then use this cash for home improvements, debt consolidation, or other expenses.

Our expert’s take: the effect of refinancing on your credit score

Eric Kirste

CFP®

A couple of items may lower your credit score when refinancing a mortgage: One, when you refinance, you will convert old debt to new debt. Old debt accumulates a history of paying on time. When a new debt shows up, there is no history. New debt is considered a risk to lenders because you haven’t had a chance to show a history of on-time payments. Two, the lender’s review of your credit will become a hard inquiry on your credit report. This notifies the credit reporting agencies you are applying for a new loan. This type of inquiry causes a small drop in your credit score. Although credit inquiries stay on your report for two years, only inquiries in the last year affect your score.

How to choose the best place to refinance your mortgage

You may have several top companies you could use to refinance your mortgage. The best way to sort through your options is to get preapproved or prequalified with a mix of lenders, including banks, credit unions, and online lenders, and compare your options side-by-side. 

Consider these factors as you weigh your options: 

• Annual percentage rates (APRs). Choosing a lender with the lowest APR will save you the most money on your refinance. The APR also includes any fees the lender charges, so it’s helpful to look at this number beyond the base interest rate. 
• Loan type. If you have a conventional mortgage, you may want a standard rate-and-term refinance. But if you have an FHA or VA loan, you must refinance through those programs. Make sure your selected lender offers the mortgage type you need.
• Customer service. The best way to tell whether a company has quality customer service is to call it before you apply. Even if you don’t need to, think of a question, call the team, and see how thorough and quick the response is. 
• Digital experience. If you’re applying for a mortgage refinance online, look for lenders with user-friendly digital platforms that allow you to apply, submit documents, and track your application progress.

Our expert’s suggestions to lower your monthly mortgage payments

Eric Kirste

CFP®

To lower your monthly payment, the options are: One, refinance your mortgage to a lower interest rate. With all else equal, a lower interest rate subsequently lowers your monthly mortgage payments. Two, work with the lender to find ways to eliminate the private mortgage insurance (PMI) cost. When you achieve at least 20% equity in your home, you might be able to request that the lender remove the PMI. Three, when you escrow your property taxes into your mortgage payment, you may see changes year to year as your property taxes change. The amount you pay in property taxes is determined by your local county’s tax assessment of your property. This assessment involves a thorough evaluation of your home and land to establish their market value. You can work with a local and reputable property tax attorney to appeal your taxes. Lowering the assessed value can result in reduced property taxes, which may also lower your monthly mortgage payment. Four, a mortgage recast involves applying a large lump-sum payment to your loan principal and keeping the same maturity (payoff) date. A recast could help you lower your mortgage payment without refinancing, meaning you can keep your current low mortgage rate in place.

Should you choose one of the best refinance banks or an online lender?

Oftentimes, you’ll see the choice to refinance your mortgage with a traditional bank or online lender. The best option for each borrower comes down to personal preference. 

Banks often have several refinancing options and may offer a variety of other financial products besides mortgages, such as checking accounts, savings accounts, credit cards, and other loans. 

If you prefer to keep most of your financial accounts with one institution, a traditional refinance bank may be the way to go. Plus, you may be able to apply in person with a loan officer if you choose a bank with physical locations. 

Online lenders often pride themselves on easy online applications with fast turnaround times. They may also be more willing to accept lower credit scores or take on riskier borrowers than traditional banks. 

Mortgage refinance eligibility requirements

You’ll often need to meet these criteria to qualify for mortgage refinancing, but requirements can vary by company.  

Factor	Requirement
Credit score	Min. 620
DTI	Max. 50% of gross monthly income
Equity	Min. 20% for cash-out refinance
Down payment required?	No
Closing costs required?	Yes

How soon can you refinance?

You can technically refinance right after closing on your original mortgage, but most lenders require a “seasoning” period of six months or more before you can refinance. This waiting period may be longer if you’ve had a bankruptcy or foreclosure.

How to apply for a mortgage refinance

Applying for a mortgage refinance is similar to when you first applied for your mortgage. Here are the general steps: 

1. Determine your goal. Decide why you want to refinance (e.g., lower interest rate, change your loan term, remove PMI, cash out) and how much you need to borrow.
2. Check your credit score and history. Knowing your credit score will help determine which lenders are more willing to work with you. Consider pausing on refinancing and improving your score if needed.
3. Gather your documentation. Similar to when you took out your original mortgage, you’ll need a few documents to refinance: proof of income, proof of home insurance, and a list of debts and assets (bank statements, retirement accounts, and other investments). 
4. Compare rates. Don’t just go with your current mortgage company. Another lender might offer the type of refinancing you need with better terms. Getting preapproved can give you an idea of how much you can borrow and at what rate.
5. Apply for refinancing. You can often submit a mortgage refinancing application online, but some lenders may give you the option to stop by a branch, too. This is also when you’ll submit all the documents you gathered in Step 3. 
6. Sign loan documents. If you’re approved, review your loan documents and make sure you know what you’re agreeing to in terms of interest rates, closing costs, and repayment periods. If all looks right, sign and prepare to close.
7. Close on your refinance. When you close, you’ll pay any closing costs, and your new lender will pay off your old mortgage. Then, you’ll start making payments on your new loan. 

Tip

Refinancing usually doesn’t require a down payment, but you’ll pay closing costs just like you did with your original mortgage. These may include appraisal fees, title fees, origination fees, and application fees. Make sure the long-term savings outweigh these expenses.

FAQ 

What is the best time to refinance a mortgage?

The best time to refinance a mortgage is when interest rates are lower than your current mortgage rate, which can result in significant savings over the life of the loan. It’s advantageous to refinance if your credit score has improved since you took out your original mortgage. This can also help secure a lower rate. 

Other ideal times to refinance include when you want to switch from an adjustable-rate mortgage to a fixed-rate mortgage, shorten the term of your loan, or if you need to tap into your home equity for major expenses.

Is it cheaper to refinance with your current lender?

Refinancing with your current lender can sometimes be cheaper because it may offer discounts on application fees or other closing costs to retain your business. Staying with the same lender might simplify the process because it already has your information. 

However, it’s essential to shop around and compare offers from multiple lenders to ensure you’re getting the best rate and terms. Even if your current lender offers cost savings, another lender might provide a better overall deal.

Are mortgage rates going down?

Mortgage rates fluctuate based on various factors, including economic conditions, inflation, and the Federal Reserve’s actions. It’s important to stay updated with the latest market trends and news to determine whether mortgage rates are going down. 

When the economy slows down or the Federal Reserve lowers interest rates, mortgage rates tend to decrease. However, predicting future rate movements can be challenging. Consulting with a mortgage professional or financial advisor can provide more personalized insights.

Is it better to refinance with your bank?

Refinancing with your bank can have advantages, such as convenience and faster processing times. Banks may also offer loyalty discounts or lower fees to current customers. However, it’s not always the best option. To ensure you’re getting the best rate and terms, it’s crucial to compare offers from multiple lenders, including mortgage brokers, online lenders, and credit unions. Each lender has different products and incentives, and shopping around can help you find the most favorable refinancing deal.

How we selected the best mortgage refinance lenders 

Since 2019, LendEDU has evaluated mortgage companies to help readers find the best mortgages. Our latest analysis reviewed 228 data points from 12 lenders and financial institutions, with 19 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of the best mortgage refinance companies