The Best Refinance Rates Ranked
To find the lenders with the best refinance rates, we looked at loan-level data filed in 2021 under the Home Mortgage Disclosure Act .
Keep in mind that mortgage interest rates hit record lows in 2020 and 2021. Todays mortgage refinance rates have risen and industry experts predict theyll stay elevated throughout 2022. That means the rates youre quoted today are likely to be significantly higher than what you see below.
Still, these average rates provide a helpful way to compare lenders side by side so you know where to start looking.
When Should You Not Refinance Your Mortgage
While refinancing your mortgage sounds good in theory, you need to make sure you’re a good candidate for one. In this case, timing and the current state of your personal finances is key.
Here are some guidelines for when refinancing might not be the best idea:
- You just bought the house: It’s usually not wise to refinance right after you buy a home. That’s because you’re paying closing costs twice and because some lenders charge prepayment fees. These essentially penalize you for paying off your mortgage loan too early.
- You can’t secure a lower interest rate: Refinancing might also be ill-advised if you’d be trading a low-interest rate for a much higher one. While there are some scenarios when it might make sense, increasing your interest rate will only add to your monthly costs and increase your interest charges in the long run.
- You have a low credit score: You probably won’t want to refinance if you have a low credit score. Low scores generally equal higher interest rates, which could reduce the savings a refinance could offer you. Generally speaking, mortgage lenders reserve their best interest rates for borrowers with scores above 740.
If you’re not sure what rate you’d qualify for, use an online tool to compare. Experts can give you an estimate of what your refinance may cost and how much it could potentially save you.
The Best Refinance Companies For 2022
We ranked the best mortgage refinance companies for 2022 based on a variety of factors, including loan options, requirements, customer satisfaction, and average refinance rates and fees.
The best lender for you will depend on your current home loan and your refinance goals. So make sure you shop around for the lowest rate and best overall deal.
Editors note: The Mortgage Reports may be compensated by some of these lenders if you choose to work with them. However, that does not affect our rankings. See our full editorial disclosures here and our review methodology here.
In this article
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How Do Home Equity Loans Work
Applying for a home equity loan is similar to applying for a mortgage. Whether you apply online or in person, you should be prepared with the following information and documentation:
- Your Social Security number
- Home insurance declarations
- Documentation of existing liens on your home, if any
Your combined loan to value ratio , credit score, payment history, and income determine how much you can borrow and your available interest rate. Home equity loans typically have a set repayment term and fixed interest rate for the life of the loan, although you may occasionally find a home equity loan with a variable interest rate.
You can expect to pay origination fees and closing costs as with a mortgage. You may also be subject to late fees for delayed monthly payments or prepayment penalties if you pay off the loan before the term is over. Reviewing the loan offer carefully and asking questions can help you plan for the necessary fees.
The entire process can take about two to six weeks from the time that you apply to when you receive funds. You can usually expect online lenders to be faster than traditional banks and credit unions.
The underwriting process takes up the majority of this time as an underwriter compares your borrowing history, creditworthiness, and financial documentation to the requirements of your loan. When underwriting is complete, youll close the loan by meeting with your lender to sign paperwork and arrange for funds disbursement. Closing can take about a week.
Rate And Term Refinance
When mortgage refinance rates reach industry lows, many people refinance their mortgages to take advantage of a lower interest rate. In these instances, the new loan covers the remaining loan balance on the current mortgage with different rates, usually resulting in lower payments.
A borrower might also switch between an adjustable and fixed-rate mortgage or change the loan term using this type of refinancing. For example, a borrower might replace a 15-year loan with a 30-year loan to reduce their monthly mortgage payment.
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Best For Customizable Terms: New American Funding
- Refinance into several types of mortgages
- Accepts alternative forms of credit
- Can’t refinance into a USDA mortgage
- Unavailable to residents of Hawaii or New York
- Offers mortgages in every US state except Hawaii and New York
- Branches in 32 US states
- If you have no credit score, you may be able to apply with alternative data such as proof of paying bills on time
- Minimum credit score displayed is for conventional refinancing
Best For A Simple Application Process: Nbkc Bank
- Refinance into a variety of mortgage types
- Easily view customized rates
- Mortgages available in all 50 US states and Washington, DC
- Cant refinance into a USDA mortgage
- Doesnt accept non-traditional credit
- Provides mortgages in all 50 US states and Washington, DC
- Branches in Kansas City, Missouri
- $750 in lender fees, including the application, origination, underwriting, and processing fees
- Minimum credit score displayed is for conventional refinancing
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Lower Rate Of Interest
Interest is the cost you pay overtime for the money you have borrowed. As a mortgage is generally of a large value, the interest component is also significant. Being driven by market forces, as well as the Central Bank, interest rates can move up or down. If rates fall significantly from the time you started your mortgage, especially of you have a fixed-rate mortgage, it would perhaps make sense to take advantage of the lower interest rates now prevailing.
An allied benefit is that it might help you pay off your loan faster.
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Types Of Mortgage Refinancing
Like with any other loan,itâs important to know that there are multiple types of mortgage refinance thatyou can obtain, depending on multiple factors. Here is a short look at each ofthem:
Rate-and-termmortgage refinance
This represents the mostbasic type of mortgage refinance and it usually changes the repayment terms ofyour initial loan, the interest rates, or both of those. This type ofrefinancing can diminish your monthly payments or allow you to save some moneywhen it comes to interest. Usually, the total owed amount will stay the sameunless you will have to add closing costs to the new mortgage.
Cash-outand cash-in refinancing
As we have already explained,a cash-out refinance is possible when you need money for other reasons and youare using your home equity to obtain it. While your mortgage debt is increasedfollowing this procedure, you end up with money that you can spend however youwant. Besides that, a cash-out refinance also allows you to get a new interestrate and term.
As for cash-in refinancing,this one consists of a large payment that not only diminishes yourloan-to-value ratio but also decreases your monthly payments and your entiredebt. However, when thinking of cash-in refinancing, you should take intoaccount whether or not that lump sum that you will have to pay will affect yourfinancial stability. There is no point in spending so much if you will be leftto struggle with financial burden afterward.
Noclosing cost and short refinance
Reversemortgage
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What Is A Cash
With cash-out refinancing, you refinance your mortgage with a mortgage that is larger than the amount you still owe on the original mortgage and then you keep the difference. Cash-out refinancing differs from home equity loans in that you are actually taking out a new mortgage and not simply taking a loan off the equity youve built up on your property.
One thing to keep in mind with cash-out refinancing is that you will still need to collect all the documentation you would for a mortgage, including proof that you can keep up with the payments.
Home Equity: Loan To Value Ratio
Lenders also evaluate the risk of giving you a loan using the loan to value ratio of your current mortgage. The LTV is calculated by dividing the outstanding mortgage balance by the current home value and multiplying by 100 to convert the answer into a percentage. Refinance lenders typically require LTV percentages below 80%, especially for cash-out refinance loans.
If you paid a down payment of at least 20%, you might already have the equity needed to refinance. The higher the down payment, the lower the LTV will be.
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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 advantageousbut its rarely free.
How We Ranked The Best Mortgage Refinance Lenders
We considered many factors in choosing our list of the five best mortgage refinance companies, prioritizing lenders with reasonable origination fees, competitive mortgage rates, and other favorable qualities. Let’s look at the ranking criterias we used, what they mean, and how they affected how we ranked our top companies.
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How To Find Your Best Refinance Rate
Be aware that the actual interest rate and fees you pay will vary. And the lenders we ranked may not necessarily offer you the best rate for your needs.
The lowest refinance rate you can get will depend on:
- Your credit score and credit report
- Your homes value
- Your existing loan-to-value ratio
- Your debt-to-income ratio
Typically, the lowest refinance rates go to borrowers with good credit, plenty of home equity, and low debt levels.
Keep in mind that the lender advertising the lowest rates wont necessarily be your least expensive option. First off, rates are personal. And second off, it may have higher closing costs to offset those low rates.
Thats why its important to do your own homework and compare personalized rates before choosing a refinance lender.
Best Online Lender: Lenderfi
LenderFi took the lead as our best online lender thanks to its online, no-hassle features where customers can search rates without handing over all their personal information, get instant online approval, and rate lock with no lender fees.
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Customers can close on their loans within two weeks of applying
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Keeps mortgage rates current for online application
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Not available in Hawaii, Missouri, Nevada, New York, and Utah
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No home equity loans
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It doesn’t offer information on minimum borrowing requirements without applying
With no lender fees, instant online approval, and the option to talk to a loan consultant by phone, LenderFi owns the best online lender title.
It offers many loan options for purchase and refinancing, including conventional FHA loans. It currently does not offer jumbo, VA, or USDA loans but 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 where 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 you must make at least six current payments and this excludes prepaid interest.
LenderFi has been in business since 2006 and offers competitive fees for a variety of loan options nationwide except in Hawaii, Missouri, Nevada, New York, and Utah.
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Are These Mortgage Refinance Lenders Trustworthy
The Better Business Bureau grades companies from F to A+. Grades are based on responses to customer complaints, honesty in advertising, and transparency about business practices. Here are the BBB grades for our top mortgage refinance companies:
| Lender | |
| Northpointe Bank | A+ |
Almost all of our top picks have an A+ from the BBB. The exceptions are Guild Mortgage, Chase, and Navy Federal. The BBB says that it gave Guild Mortgage and Chase an A- rating rating due to government actions taken against the businesses. Meanwhile, Navy Federal has an NR because it is responding to customer complaints.
Several of these lenders do have recent public controversies, though, even the ones with great BBB grades.
The US Justice Department required Rocket Mortgages parent company Quicken Loans to pay $32.5 million for alleged mortgage fraud in 2019. The Justice Department claimed Quicken Loans approved mortgage applications it shouldnt have. The company never admitted to mortgage fraud, although it did pay the settlement.
A Navy Federal employee has claimed the lender pressured mortgage underwriters to approve loans even if they didnt have sufficient reason to believe applicants could repay the loans. Then she filed a lawsuit and said Navy Federal retaliated against her whistleblowing by changing her job duties. She dropped the case in late 2020.
If any of these recent issues worry you, you may decide to go with one of the other refinance lenders on our list.
How Do I Refinance My Student Loans
Many lenders offer student loan refinancing, from traditional banks, to credit unions to online lenders. Before choosing one, shop around and compare your offers. Several lenders make it easy to get an instant rate quote online with no impact on your credit score. By checking your rates with a variety of providers, you can find a refinanced student loan with your best possible terms.
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Ology: How We Chose The Best Mortgage Refinance Lenders For 2022
To choose the top mortgage refinance lenders of September 2022, we looked at four main factors:
- Customer satisfaction. If the mortgage lender appeared in the J.D. Power 2021 Primary Mortgage Origination Satisfaction Survey, we looked at its ranking. If it wasn’t in the survey, then we read online customer reviews.
- Ethics. Almost all of our top picks received an A+ from the Better Business Bureau, which measures companies’ trustworthiness. We also researched and considered any scandals in the past three years.
- Loan types. Does a lender offer several types of loan refinances to suit customers’ needs, including conventional loans, government-backed loans, and cash-out refinances?
- Affordability. We looked at lenders’ minimum required credit scores. We also checked whether the lenders offer streamline refinances for borrowers refinancing from a government-backed mortgage into the same type of mortgage, which can be more affordable for borrowers with less-than-perfect financial profiles. Finally, we looked at whether they have any flexible credit guidelines. This could include allowing borrowers to have recent negative events on their credit reports, or accepting non-traditional credit, like utility bills and rent payments, in lieu of a traditional credit score.
Our Top Picks For The Best Mortgage Refinance Lenders Of September 2022
- Refi Loan Types
- 15- and 30-year Conventional, ARM, FHA, VA, Jumbo
Rocket Mortgage has ranked in the top 3 in the J.D. Power U.S Primary Mortgage Origination Satisfaction Study for eight consecutive years. Although the company is deeply rooted in online technology, it also has over 3,000 home loan experts available seven days a week to help you complete your application over the phone.
Rocket Mortgage is one of the lenders that offer Fannie Maes RefiNow and Freddie Macs Refi Possible refinance options for those with a debt-to-income ratio of up to 65% who currently have a mortgage with either one of the government-sponsored enterprises. Homeowners who qualify for these programs will see a reduction of at least 0.5% of their interest rate and can also take advantage of up to $500 to cover appraisal costs. To qualify, the homeowner must have a good payment history, a FICO credit score of 620 or higher, and at least 3% equity in a one-unit primary residence.
- Refi Loan Types
- Conventional, fixed-rate, ARM, VA, FHA, HARP
loanDepot stands out for its mello smartloan, an end-to-end digital portal that uses artificial intelligence to verify asset and employment details and can also perform credit checks and begin the home appraisal process.
Choosing loanDepot for a mortgage refinance comes with some perks, the company offers to waive lender fees and reimburse appraisal fees on future refinances after youve refinanced with them at least once.
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Loandepot: Best For Easy Access To Funding
loanDepot is a unique mortgage platform that you might know because it lends its name to a ballpark. However, it is also a wonderful institution that helps you gain easier access to home loans. The loanDepot website is easy to navigate, has a calculator that better explains how much a home costs and what your mortgage will look like. You can register and apply online via a desktop or mobile device. You can also call, email or reach out via social media.
When you use loanDepot, the customer support team can help you select the appropriate loan and submit all the proper documentation. Because the company has a no steering policy, the agents you speak with do not earn a commission and are only incentivized to lead you to the best mortgage for your family. This makes it easier to refinance to a loan that you are more comfortable with.
You can also choose from fixed-rate mortgages, ARMs, FHA, VA, 203k, and jumbo mortgages.
