Best Mortgage Lenders for Refinancing

Rocket Mortgage is the best choice for refinancing

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Mortgage lenders for refinancing help homeowners replace an existing mortgage with a new one. Many people use mortgage refinancing as a way to reduce their interest rate, pay off their loan more quickly, lower their monthly principal and interest payment, or cash out some of their equity to make home improvements or pay off other debt. 

The best mortgage lenders for refinancing are transparent about their process, offer competitive rates, and make it easy to apply online.

Best Mortgage Lenders for Refinancing of 2021

Best Overall : Rocket Mortgage


Rocket Mortgage

Rocket Mortgage

  • Minimum Credit Score: 580 to 620
  • Minimum Equity: 0% to 20%
  • Online Application: Yes
Why We Chose It

Rocket Mortgage is one of the most transparent mortgage refinancing lenders we reviewed and offers financing in all 50 states.

Pros & Cons
Pros
  • Credit score as low as 580

  • Relatively high DTI of 45%

  • Conventional, FHA, and VA loans

Cons
  • ARMs aren’t available

  • No in-person customer service

  • No USDA loans

Overview

Rocket Mortgage operates in all 50 states and the District of Columbia. Its level of transparency makes it stand out from the competition, as Rocket Mortgage makes it easy to understand its qualifications, loan process, and rates. 

Applicant Requirements

Although Rocket Mortgage requires a credit score of at least 580, you’ll usually need a score of 620 or better to qualify. Plus, your debt-to-income ratio shouldn’t be any greater than 45%, and you’ll need to have at least two years of stable work history. When you apply, you’ll be required to submit documentation to prove your income and the assets listed in your application (e.g., tax returns, pay stubs, and bank statements). 

The amount of equity you need in your home will vary depending upon the loan you choose. If you want to get rid of private mortgage insurance (PMI), you’ll need at least 20% equity. For a cash-out refinance, you’ll need at least 15% equity. In some cases, you may not need any equity (e.g., an interest-reduction FHA refinance loan). However, the more equity you have in your home, the better the rate you’ll get and the easier it will be to qualify. 

Application Process

You can apply for a refinance with Rocket Mortgage online. The application will guide you through a series of questions about your home and financial circumstances. Once you’ve applied, one of the company’s home loan experts will call you to talk through the process. Since Rocket Mortgage is an online lender, you can’t visit an office or apply in person.

Best for Customer Service : SoFi


SoFi

SoFi

  • Minimum Credit Score: Not disclosed
  • Minimum Equity: 5% to 20%
  • Online Application: Yes
Why We Chose It

SoFi gives all of its customers a $500 discount on mortgage refinancing fees, along with other value-added customer benefits like access to an unemployment protection program, rate discounts on other loans, and more. 

Pros & Cons
Pros
  • Pre-qualify with a soft credit check

  • Refinances are available in 45 states

  • Discounts on refinancing fees

Cons
  • Credit score requirements not disclosed

  • ARMs aren’t available

  • FHA and VA loans aren’t offered

Overview

SoFi offers home mortgage refinances in 45 states and the District of Columbia. You can’t get a home loan from SoFi for properties in Hawaii, Missouri, New Mexico, New York, or West Virginia. 

If you choose to refinance your mortgage with SoFi, you’ll get a $500 discount on your loan fees just for being one of its customers (called "members"). Plus, the company sometimes offers a $20 gift card if you check your rate, and you’ll get a wide variety of free benefits like rate discounts on other loans and even access to an unemployment protection program. 

Applicant Requirements

SoFi will evaluate such factors as your credit score and history, DTI ratio, and employment history to determine if you qualify for a mortgage refinance, although the specific requirements aren’t disclosed. 

You will need equity of at least 5% to 20% to qualify for a mortgage refinance with SoFi. After you’ve applied, the company will order an appraisal to confirm how much equity you have in your home.  

Application Process

With SoFi, the application process is completed entirely online. The company will use a soft credit check to pre-qualify you, which won’t affect your credit score. A hard credit check will only be required once you’ve decided to proceed with a loan.

Best for Online : Better Mortgage Corporation


Better.com

Better.com

  • Minimum Credit Score: 620
  • Minimum Equity: Not disclosed
  • Online Application: Yes
Why We Chose It

It takes as little as three minutes to apply for a mortgage refinance online with Better without impacting your credit unless you decide to move forward with your mortgage. Plus, you’ll get a loan estimate in seconds and can lock your rate whenever you want, fully online. 

Pros & Cons
Pros
  • No origination fees

  • Soft credit check to get pre-qualified

  • ARMs are available

Cons
  • VA and USDA loans aren’t offered

  • FHA loans are only available for home buyers

  • Equity requirements aren’t disclosed

Overview

Better Mortgage Corporation (Better) offers a fully online mortgage refinancing experience, with a simple application that only takes minutes to complete and, unlike most lenders, you won’t pay any origination fees. Better operates in 46 states (excluding Hawaii, Massachusetts, Nevada, and New Hampshire) plus the District of Columbia. 

Unlike many lenders, you can lock your rate whenever you want by accessing your account online without needing to make a single telephone call. You can get conventional refinance loans with Better, but it only offers FHA loans for home buyers. It doesn’t offer other types of government-backed mortgages, like VA or USDA loans. 

Applicant Requirements

You’ll need a credit score of at least 620 to qualify for a refinance with Better. You’ll also likely need a DTI ratio of no more than 45% to 50%. Once you’ve applied, Better will order an appraisal to determine how much equity you have in your home. Better doesn’t disclose its equity requirements.

Application Process

The entire application process is completed online. You can pre-qualify for a mortgage with Better in three minutes and will get a loan estimate right away. The company will use a soft credit check to see if you meet its minimum credit score requirement. If you decide to proceed, Better will pull a hard credit check to get you officially approved.

Best Bank : Bank of America


Bank of America

 Bank of America

  • Minimum Credit Score: Not disclosed
  • Minimum Equity: 0% to 20%
  • Online Application: Yes
Why We Chose It

Bank of America offers online mortgages nationally, plus it has full-service branch locations in 37 states and the District of Columbia, making it easy to meet with a loan officer in person.

Pros & Cons
Pros
  • Full-service branches in 37 states

  • Conventional, FHA, and VA loans

  • Mortgages available nationally

Cons
  • Credit score requirements aren’t disclosed

  • Lower DTI than some lenders

  • Rates on VA and FHA loans not disclosed

Overview

Bank of America is one of the largest banks in the United States, offering mortgages in all 50 states. Not only can you apply online, but there are full-service branch locations in 37 states and the District of Columbia where you can meet with a loan officer in person.  

Applicant Requirements

Bank of America doesn’t disclose what credit score it takes to qualify for a mortgage refinance, although you can expect to need a score of at least 620 to 680 or better. The company evaluates much more than your credit score when qualifying you, including your ability to repay the loan (you’ll need a DTI ratio of 36% or better) and your home’s value.

The company will order an appraisal to verify the value of your home and determine the amount of equity you have in your home. To qualify for a conventional loan, you’ll need 5% to 20% equity or more in your home. The equity requirements for VA and FHA loans are usually much lower, often ranging from 0% to 3.5%. 

Application Process

You’ll complete Bank of America’s mortgage refinance application online in five minutes or less. Once you’ve submitted your online application, a loan specialist will work with you throughout the entire mortgage process. You’ll manage the entire refinance process online.

Read the full Bank of America review.

Best Credit Union : Navy Federal Credit Union


Navy Federal Credit Union

 Navy Federal Credit Union

  • Minimum Credit Score: No minimum 
  • Minimum Equity: 0% to 5%
  • Online Application: Yes
Why We Chose It

It’s easy to become a member of Navy Federal Credit Union, and you can get a mortgage refinance loan in all 50 states. 

Pros & Cons
Pros
  • Available nationwide

  • No minimum credit score

  • Zero equity options

Cons
  • Must be a military member or associated with one

  • No FHA loans

  • DTI requirements aren’t disclosed

Overview

With Navy Federal Credit Union, membership is open to current and former members of all branches of the U.S. armed forces, along with their relatives (e.g., children, grandparents, parents, and siblings) and members of their household (e.g., roommates), and you can be located anywhere in the U.S. and military branches throughout the world. Credit unions often have very restrictive membership requirements, making Navy Federal Credit Union stand out.

Applicant Requirements

When evaluating if you qualify for a mortgage refinance, Navy Federal Credit Union will consider such things as your credit history, ability to repay your loan, and employment history (you’ll need job stability of two or more years). It doesn’t have any specific credit score minimums.  

One of the best features about Navy Federal Credit Union is that you can potentially qualify if you have as little as 0% to 5% equity in your home. Military service members and veterans can qualify with the lowest equity, as Navy Federal Credit Union offers several VA and military choice loan options. Plus, non-military members may only need 3% to 5% equity. 

Application Process

The application to refinance a mortgage with Navy Federal Credit Union is completely online. Navy Federal Credit Union has 340 branches worldwide, many of which offer in-person support for home loans. You can use its online tool to see if there is a branch near you if you want to schedule a face-to-face meeting.

Read the full Navy Federal Credit Union review.

Best for Low Fees : Ally Bank


Ally Bank

 Ally Bank

  • Minimum Credit Score: 620 to 701
  • Minimum Equity: 20% for a cash-out refinance or jumbo loan
  • Online Application: Online
Why We Chose It

You won’t pay any lender (aka, origination) fees for a mortgage refinance with Ally Bank, making it stand out from the competition since most lenders do charge those fees. 

Pros & Cons
Pros
  • No lender fees

  • Pre-qualifying doesn’t affect your credit score

  • ARMs are available

Cons
  • No physical branches

  • Mortgages aren’t available in 13 states

  • No government-insured loans

Overview

Ally Bank is a fully online bank that offers mortgage refinances in 37 states and a full suite of banking products nationally. Per a conversation with the bank, although Ally currently doesn’t offer mortgages in AK, CT, HI, MA, MD, MN, NC, NH, NV, NY, VT, VI, and WY, but it’s actively working on expanding its lending footprint. 

Unlike most banks, Ally doesn’t charge any lender fees.

Applicant Requirements

The credit score you need with Ally Bank will vary depending upon the type of loan you get. For conventional loans, you’ll need a score of 620 or better. To qualify for a jumbo loan, you’ll need a credit score better than 700.

Although Ally Bank doesn’t disclose most of its specific equity requirements, you’ll usually need to keep at least 20% equity in your home if you want to get a cash-out refinance loan. Plus, you’ll need at least 20% equity to qualify for a jumbo loan. 

Application Process

You can apply for a mortgage refinance with Ally completely online in as few as 15 minutes. Once your application is complete, you’ll get an instant quote, and you can lock in your rate right away. Plus, Ally uses a soft credit check to pre-qualify you, meaning your credit score won’t be impacted unless you decide to proceed. 

Although the bank doesn’t have any physical branch locations, it offers 24/7 customer support if you have questions about your loan application. 

Read the full Ally Bank review.

Best for Military Servicemembers : Veterans United Home Loans


Veterans United Home Loans

 Veterans United Home Loans

  • Minimum Credit Score: 640
  • Minimum Equity: 0%
  • Online Application: Yes
Why We Chose It

Veterans United Home Loans was chosen because it is one of the nation’s highest-volume VA lenders and can provide financing to military servicemembers in all 50 states.

Pros & Cons
Pros
  • In-person appointments available in 17 states

  • Appraisal is often not required for IRRRL

  • May not need any equity

Cón
  • Only available to military servicemembers

  • Only offers VA loans

  • Only offers 15- or 30-year repayment terms

Overview

Veterans United Home Loans offers VA mortgages in all 50 states, has consistently been one of the highest-volume VA lenders, and offers two refinancing options. The first is a “streamlined” Interest Rate Reduction Refinance Loan (IRRRL) that’s good for those with existing VA loans who want a reduced interest rate. The other is a cash-out refinance VA loan that’s available to any qualified veteran, even if they don’t have an existing VA loan.

Applicant Requirements

Veterans United Home Loans only offers loans to military servicemembers who are eligible for a VA loan. For example, you’re a National Guard member with at least six years of service or you were on active duty for more than 90 days (consecutively) during wartime (181 days during peacetime).

While Veterans United Home Loans doesn’t enforce strict credit score requirements, you can expect to need a credit score of at least 640 or better. Often you won’t need any equity to qualify for a VA loan. Plus, in most cases, you won’t need an appraisal to qualify for an IRRRL loan. You’ll need an appraisal if you opt for a cash-out refinance VA loan, and you’ll likely be required to keep some equity in your home (specifics aren’t disclosed).  

Application Process

With Veterans United Home Loans, you’ll apply completely online. During the pre-approval process, some of the required documentation includes copies of your government identification, DD-214, points statements if you serve in the National Guard or as a Reservist, a statement of service if you’re serving in active duty, recent pay stubs, two years of W-2s, recent bank statements, and disability awards letters (as applicable). 

Once you’re pre-approved, Veterans United Home Loans will order an appraisal. You can expect to receive individualized support throughout the entire loan process. Plus, if you want to meet with someone in person to discuss your loan, Veterans United Home Loans has physical branches in 17 states.

Best for No Closing Costs : U.S. Bank


U.S. Bank

U.S. Bank

  • Minimum Credit Score: 730
  • Minimum Equity: 30%
  • Online Application: Yes
Why We Chose It

U.S. Bank offers a simple mortgage refinance option that allows you to refinance your mortgage balance or take additional cash-out, with no closing costs, origination fees, or application processing fees. This means you can refinance your loan without any out-of-pocket costs, something not offered by the other lenders on our list.

Pros & Cons
Pros
  • No closing costs

  • No prepayment penalties

  • Available in all 50 states

Cons
  • Available for loans of $50,000 to $200,000

  • Excellent credit required

  • No 30-year terms or ARMs

Overview

If you have excellent credit and only need to borrow between $50,000 to $200,000, U.S. Bank offers a streamlined conventional mortgage loan. It stands out from the competition because it carries no closing costs, origination fees, or application processing fees. 

Applicant Requirements

You’ll need to have an excellent credit score of at least 730 and at least 30% equity in your home to qualify. You’ll also need to have a U.S. Bank personal checking or savings account that you’ve enrolled in autopay. 

Application Process

You can apply for a U.S. Bank Smart Refinance online, over the phone, or in-person at one of its branches. Someone from the bank will contact you after your application has been reviewed to let you know what documentation will be required (e.g., income and insurance documents). The bank will then order an appraisal to confirm how much your home is worth.

Read the full U.S. Bank review.

Final Verdict

If you’re looking to refinance your mortgage, you have many options which vary based on where you live, your credit score, and the type of loan you want. While all of the lenders on our list are solid choices, we selected Rocket Mortgage as our best overall.

Not only is Rocket Mortgage transparent about its mortgage refinancing product, but it’s available in all 50 states, and you can apply online. Plus, you may be able to qualify for a mortgage refinance with a credit score as low as 580 and possibly without any equity in your home. Rocket Mortgage also offers conventional and government-insured mortgage options.

Compare Providers

Company Minimum Equity Minimum Credit Score Application Process No. States Available
Rocket Mortgage
Best Overall
0% to 20% 580 to 620 Online 50
SoFi
Best for Customer Service
5% to 20% Not disclosed Online 45
Better Mortgage Corporation
Best for Online
Not disclosed 620 Online 46
Bank of America
Best Bank
5% to 20% Not disclosed Online 50
Navy Federal Credit Union
Best Credit Union
0% to 5% No specific requirement Online 50
Ally Bank
Best for Low Fees
20% for cash-out refinance or jumbo loan 620 to 701 Online 37
Veterans United Home Loans
Best for Military Servicemembers
0% 640 Online 50
U.S. Bank
Best for No Closing Costs
30% 730 Online, By Phone, or In-Person 50

Guide to Choosing the Best Mortgage Lenders for Refinancing

Is Mortgage Refinancing Right for You?

The ultimate goal of a mortgage refinance should be to improve your overall financial condition. When this is true (for example, you get a lower interest rate or you’re able to pay off your loan quicker), then mortgage refinancing is a good idea. If you’re not going to be in better financial condition after the mortgage refinancing is complete (for example, the rate is higher or you don’t have any equity left in your home), then it’s not a good idea. 

If you're looking to refinance, consider the following:

  • Do the benefits will outweigh the costs? You need to make sure that these costs associated with refinancing are worth it. For example, if you’re refinancing to get a lower rate, you need to make sure that any interest savings will cover the costs you paid to refinance. If you plan to sell the home in the short term, it’s unlikely that you’ll be able to recoup the costs. 
  • Will your interest charges will be reduced? If you’re able to get a lower interest rate, you’ll pay less interest every month and over the loan’s life. 
  • Will it shorten the repayment term? If you reduce your repayment term, you might not pay less in interest monthly, but you’ll pay less in the long-term since your loan will be paid off sooner (assuming the rate on your new loan is the same or lower than on the old loan). 
  • Will refinancing allow you to make other financial improvements? Sometimes people use a mortgage refinance to consolidate other debt. For example, you might use a mortgage refinance to consolidate your first mortgage and home equity loan and reduce the total amount of debt you pay each month. 

Understand the Costs of Refinancing Your Mortgage

A mortgage refinance includes the principal you owe on your home and other costs including: 

  • Origination fees: These are costs your lender charges to accept and process your application as well as to pay your loan officer. You'll usually be required to pay origination fees even if your loan doesn’t go through. These fees vary widely by lenders, so make sure to ask about them at the onset of your application. You can generally expect these fees to range from around 0.5% to 1% of the loan amount. 
  • Discount points: This is an optional fee you can pay to “buy down” your interest rate. You can expect each discount point to cost 1% of your loan amount (e.g., $1,000 on a $100,000 loan). You’ll generally be able to reduce your interest rate by 0.25% for each point you buy. It’s best to pay for these fees when you close on the loan, but you may be able to wrap the fees into your new mortgage. 
  • Appraisal fees: Most lenders require you to pay for an appraisal of your new home. On occasion, lenders will pay these fees for you. Appraisal costs vary widely, depending on your home’s nature, where it’s located, and the appraiser your lender chooses. To set a basic expectation, the cost of an appraisal often falls in the range of $300 to $450.
  • Closing costs: These are additional third-party costs you’re required to pay at loan closing. Closing costs include such fees as those related to title policies, insurance, inspections, recording fees, and more. The amount you’ll pay for these costs varies depending on the complexity of your transaction. A good rule of thumb for the average closing cost range is 2% to 7% of the loan amount.

When considering a mortgage refinance, make sure to carefully consider all costs associated with the transaction before going through with it. 

Choose a Mortgage Lender for Refinancing

When you’re ready to refinance your mortgage, finding the best lender comes down to your financial condition, how much equity you have in your home, and the repayment terms you need. Make sure the lender you choose offers options that are good for your situation. 

Here’s what you should consider when choosing a mortgage lender for refinancing.

  • Your financial condition: Ensure the lender offers options right for your financial condition before applying. When qualifying you, lenders will consider your willingness (e.g., credit score) and ability (e.g., DTI ratio) to repay the loan. Most mortgage lenders will require you to have a credit score that’s no less than 580 to 640. Plus, you’ll usually need to have a DTI ratio of 36% to 43%. 
  • Amount of equity you have in your home: Make sure you understand the lender’s equity requirements before you apply. If you want a cash-out refinance, many lenders require at least 20% equity. If you have less than 20% equity, you’ll usually need good credit to qualify, or you can consider a government-insured loan (e.g., VA or FHA).
  • Repayment terms you need: Make sure the lender offers repayments terms right for your financial situation. A fixed-rate mortgage with a long term (e.g., 30 years) is good if you want to ensure your P&I payment won’t change over the life of the loan. An ARM is better if you plan to sell your home soon or you’re not concerned about rate changes.

Frequently Asked Questions

What Is Mortgage Refinancing?

Mortgage refinancing is when a homeowner gets a new mortgage to replace an existing one. It’s usually used when people want to reduce their monthly payments, shorten (or lengthen) their repayment terms, or cash out some of their equity. Although mortgage refinancing can be a good way to accomplish these goals, it usually costs 3% to 6% of the loan amount. So, it’s important to make sure any benefits will outweigh the costs you’ll be required to pay. 

In a low-interest-rate environment, you may be able to reduce the amount of interest you’re paying and lower your payments by refinancing your mortgage. You might even be able to shorten your repayment term without significantly increasing your payment. The latter is especially true if you’ve had your existing mortgage for three to five years.

It’s important to make sure that you’re going to keep the loan long enough to recoup the refinance costs. For example, if you plan to sell the property in a year, you might not be able to benefit from enough interest savings to make the refinance worth it. Make sure to consider these types of factors before deciding to go forward with a mortgage refinance.

How Does Mortgage Refinancing Work?

The process of refinancing your mortgage is very similar to getting a new mortgage. You’ll need to apply for the mortgage and provide your lender with any required paperwork (e.g., tax returns, bank statements, etc.). Your lender will check your credit score and evaluate your ability to repay the loan by looking at your debt-to-income (DTI) ratio to determine if you have an acceptable level of creditworthiness. 

Once you’re pre-approved, you’ll be able to lock in your interest rate and your lender will order an appraisal. The purpose of the appraisal is to make sure there’s enough equity in your home. Although real estate values typically increase, this isn’t always the case. So, lenders need to know how much your property is worth before moving forward. This is especially important if you want to cash out some of your home equity for you and the lender. 

Is Mortgage Refinancing a Good Idea?

The ultimate goal of a mortgage refinance should be to improve your overall financial condition. When this is true (for example, you get a lower interest rate or you’re able to pay off your loan quicker), then mortgage refinancing is a good idea. If you’re not going to be in better financial condition after the mortgage refinancing is complete (for example, the rate is higher or you don’t have any equity left in your home), then it’s not a good idea. 

Before deciding to go forward with a mortgage refinance, it’s critical to think about why you’re doing it and what you hope to accomplish. Also, make sure to think about the long-term. If there is any doubt about whether it will help you financially, it’s better to keep your existing mortgage.

Will My Payment Increase if I Refinance My Mortgage?

Your payment will not necessarily increase if you refinance your mortgage. In fact, depending on what you want to accomplish with the refinance, your payment might go down. For example, P&I payment will decrease if you keep the same repayment term (e.g., 30 years), get a lower rate, and refinance your mortgage balance. It might even go down if you shorten the term to 20 or 25 years, depending on how long you’ve had the loan.

To determine how a mortgage refinance will affect your P&I payment, you can use a mortgage calculator. With the calculator, you can try various refinancing scenarios to see how the payment will change. You can even compare how much interest you’ll pay over the life of the loan. 

Remember, the quicker you’re able to pay off the loan, the less interest you’ll pay. For this reason, even if your payment increases, the interest savings might make the refinance worth it.

What Costs Are Involved in Refinancing a Mortgage?

Mortgage refinance costs may include:

  • Origination fees: These are costs your lender charges to accept and process your application as well as to pay your loan officer. You'll usually be required to pay origination fees even if your loan doesn’t go through. These fees vary widely by lenders, so make sure to ask about them at the onset of your application. You can generally expect these fees to range from around 0.5% to 1% of the loan amount. 
  • Discount points: This an optional fee you can pay to “buy down” your interest rate. You can expect each discount point to cost 1% of your loan amount (e.g., $1,000 on a $100,000 loan). You’ll generally be able to reduce your interest rate by 0.25% for each point you buy. It’s best to pay for these fees when you close on the loan, but you may be able to wrap the fees into your new mortgage. 
  • Appraisal fees: Most lenders require you to pay for an appraisal of your new home. On occasion, lenders will pay these fees for you. Appraisal costs vary widely, depending on your home’s nature, where it’s located, and the appraiser your lender chooses. To set a basic expectation, the cost of an appraisal often falls in the range of $300 to $450.
  • Closing costs: These are additional third-party costs you’re required to pay at loan closing. Closing costs include such fees as those related to title policies, insurance, inspections, recording fees, and more. The amount you’ll pay for these costs varies depending on the complexity of your transaction. A good rule of thumb for the average closing cost range is 2% to 7% of the loan amount.

When considering a mortgage refinance, make sure to carefully consider all costs associated with the transaction before going through with it. 

Does Refinancing a Mortgage Impact My Credit Score?

Your credit score can be impacted if you refinance your mortgage in some of the following ways: 

  • Hard checks can lower your score: Although most lenders use soft credit checks, which don’t impact your credit score, to pre-qualify you, they will pull a hard credit check, which can impact your score, once you’ve decided to proceed with the loan. 
  • Paying off your existing mortgage can reduce your credit score: Once the refinance is complete, your existing mortgage will be paid off, and your new mortgage will appear on your credit report. The credit scoring agencies consider the age of your accounts, so your credit score might be reduced. 

The items noted above aren’t likely to have a major impact on your credit score. Plus, any short-term impact on your credit score should be offset by the benefits you receive from the refinance. This is especially true if the refinance serves to improve your overall financial condition. Keep in mind that you need to keep making the payments on your existing mortgage until the refinance goes through. 

It could be tempting to skip a payment if you think the refinance will occur close to when the payment is due. However, late payments reported to the credit bureaus can negatively affect your credit score. So, when in doubt, make the payment. 

Can I Lower My Mortgage Rate Without Refinancing?

You may be able to lower your mortgage rate without refinancing by asking your lender to modify your mortgage. Loan modifications are typically only offered to borrowers who are having trouble making their payments due to some type of financial hardship. To ease their financial burden, lenders may reduce their interest rates. 

Some lenders who offer “portfolio” loans (meaning they make the loan using their own terms and conditions, and the loan isn’t insured by or sold to a third-party) may offer modifications to lenders who aren’t experiencing financial hardships. They’ll usually do this if the new rate will improve the loan in some way  (e.g., it goes from an adjustable-rate to a fixed-rate) or if it allows them to keep a good loan in their portfolio (e.g., they may not want you to take your loan to another lender). 

Keep in mind that your loan will typically need to be in good standing, payments are current, and you haven’t been late in the past year, and your credit may need to be checked to qualify for a loan modification. However, it’s definitely worth asking your lender if they’re willing or able to modify your loan. The process is much simpler than a mortgage refinance, and it can save you money over time. 

Methodology

When reviewing the best mortgage lenders for refinancing, we evaluated more than two dozen providers. In our search, we looked for lenders that offered a variety of loan types, rates, repayment terms, and qualifications. We also looked at the application process (online vs. in-person), nationwide availability of the lender, and other features such as physical branches and supplemental programs (e.g., unemployment protection).

Article Sources

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  2. USA.gov. "Mortgages - A Consumer's Guide to Mortgage Refinancing." Accessed February 18, 2021.

  3. Quicken Loans. "Mortgage Origination Fee: Everything You Need to Know." Accessed February 18, 2021.

  4. ASA. "Appraisals FAQ." Accessed February 18, 2021.

  5. NAIC. "The Smart Consumer's Guide to Reducing Closing Costs." Accessed February 18, 2021.