Home refinance your mortgage can be a great way to secure a good interest rate, reduce your monthly payments, or get rid of personal mortgage insurance.
However, you do not have to refinance with the lender that you used for your initial mortgage. You can find a good fit with a different company at this point – and a good deal.
We have selected lenders that offer a variety of mortgages that you can refinance, and most have received an A + rating from the Better Business Bureau. Many of our top picks also improve on customer satisfaction and accept alternative types of credit if you do not have credit.
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What is a Home Refinance Mortgage?
Refinancing a mortgage (or any other type of loan in that regard) refers to the process of obtaining a new loan — usually on better terms for the purpose of replacing an existing loan.
When it comes to mortgages, you can refinance your existing debt with one of our best refinancing lenders. Or, if you have significant equity in your home, you can get a new loan for a higher amount and get some cash in the process.
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What is the risk of refinancing?
The main risk of refinancing is that it will not be as successful as you think. We will consider this a little more in the next section, but a lower interest rate on your mortgage can only be understood if it saves you money compared to the cost of the loan.
It can also be risky if you refinance a loan at a fixed rate from an adjustable rate mortgage, or vice versa.
For example, suppose you have a fixed-rate mortgage at 5% and you refinance at an adjustable-rate mortgage with an interest rate of 3% for five years, but then there is an annual adjustment.
If the market interest rate goes up, you can pay significantly higher interest over time if you keep your existing mortgage.
Best Home Refinance Mortgage Company
If you have a variable income due to self-employment, a short credit history but good income, or a combination of other factors that may make your application a little harder to approve, then New American funding should be high on your list.
While you still need to meet the FHA loan credit score and down payment requirements, new American funding is a little more flexible when it comes to approvals.
The company may manually review the applications, which may give you a better chance of approval than a fully computerized loan underwriting process.
While New American is a leader in underwriting for some applicants, it does not provide the most powerful digital experience.
But if you are self-employed and struggling to meet mortgage criteria elsewhere, setting up a subper online system can be worthwhile.
Rocket Mortgage (formerly Quicken Loan) is the largest mortgage lender in the United States, generating 541,000 loans in 2019. JD Power ranks Rocket as the top mortgage platform for customer service in 2020.
After testing multiple online mortgage applications, it has emerged as a clear winner, thanks to the ability to link online bank accounts to prove funding, easy-to-understand menus and prompts, and a quick, paperless approval process.
You don’t get the same personalized service offline with an online lender, but if it saves time and money, you can personally prefer the online experience. And, while the initial experience is online, you can call Rocket Mortgage Customer Support for help when you need it.
Carrington is willing to lend to borrowers who meet the FHA’s minimum credit score of 500. This makes Carrington a top choice for borrowers struggling for approval because of the negative markings on their credit reports.
With high credit scores, borrowers can look for savings elsewhere, and Carrington is a good last resort for short-credit applicants.
You can expect higher interest rates if your credit score is within 500, but it can be worth keeping your foot on the homeowner’s door if you can handle mortgage terms.
If you are concerned about higher rates due to your credit history, talk to your mortgage officer about the option of adding a co-borrower, accepting gifts for down payment funds, and other opportunities that the FHA program gives you.
Among the largest national banks, including the brick-and-mortar branch, Chase is a good alternative to FHA loans because it provides F 2,500 to $ 5,000 Chase home buyer grants to some FHA borrowers through its DreamMaker program.
Chase operates more than 4,700 branches, giving you personalized customer service and plenty of room to help you apply. But Chase also offers an online and mobile experience, making it a good choice for powerful customer service options.
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