Are you having trouble paying your current mortgage every month? Have interest rates fallen since you got your loan? If you answered “yes” to either of these questions, it might be time to consider a refinance. You can impact your monthly mortgage payments, remove private mortgage insurance, shift to an adjustable-rate or fixed-rate mortgage, change to the current mortgage rates and even cut back on origination fees.
Best Refinance Mortgage Companies
Now that you understand how refinancing works, it’s time to start getting quotes. Let’s take a look at some of the best mortgage companies on our radar.
1. Best for Bank Statement Loans: Angel Oak Mortgage Solutions
Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio Non-QM mortgage loans. This mortgage refinance lender is licensed in 45 states and offers competitive rates and quick closing times.
Angel Oak Mortgage Solutions offers a wide range of mortgage solutions for various needs. Whether you are looking to purchase a home, cash-out on your current property, or refinance at a different mortgage rate, they have options for you.
With loan amounts available up to $3.5 million, they can support you in financing properties of different values. They cater to primary residences, second homes, and investment properties, and accommodate various types of properties such as single-family homes, townhomes, and condos.
As an added convenience, they offer options for self-employed borrowers and real estate investors who may not have tax returns readily available. They also provide opportunities for those with 1099 income and offer government loan products like FHA, USDA, and VA loans.
With competitive rates on conventional purchase and refinance, Angel Oak Mortgage Solutions ensures that you have options to suit your financial goals.
- Considers unique borrower situations
- Quick loan approval process
- Offers competitive interest rates
- Stricter qualification requirements
- Higher interest rates and fees
2. Best for Simple Applications: Rocket Mortgage®
You won’t need to worry about navigating a complicated loan application process with a Rocket Mortgage® refinance. Rocket Mortgage® has taken as many steps as it can to simplify the refinancing process. Its intuitive system is so easy to navigate that you can complete your application on your phone. Rocket Mortgage® services many different types of loans, from USDA loans to conventional mortgage and even jumbo loans.
Its website is also packed with information on refinances and offers a host of great resources. Looking for the simplest mortgage process possible? Be sure to consider Rocket Mortgage®.
- Apply online through their website
- Faster loan processing times
- Variety of mortgage options
- Lack of personal interaction
- Inability to negotiate terms
3. Best for Self-Employed Professionals: CrossCountry Mortgage
CrossCountry Mortgage makes it easy for all types of home buyers to get approved for a mortgage. Their flexible requirements can help you get financing, with no employment or income verification and no minimum DTI. CrossCountry Mortgage offers traditional loan terms, as well as more flexible home payment plans with their 40-year loan program.
It’s also easier to get approved if you’re self-employed. Tax returns are not required and you’ll only need one year of self-employment income history and a minimum credit score of 580. CrossCountry Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts.
CrossCountry Mortgage is licensed to lend in California, Colorado, Connecticut, DC, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Washington.
- Wide range of mortgage options
- Competitive interest rates and flexible terms
- Dedicated mortgage specialists
- Limited information available about specific mortgage products and rates on their website
4. Best for High Debt-to-Income Ratio: Bank of America
Your debt-to-income (DTI) ratio is a percentage that expresses how much of your monthly pre-tax income goes towards your recurring debts. Most refinance lenders require you to have a DTI ratio of less than or equal to 50% when you refinance, which means that less than 50% of your income goes to things like housing, credit card debt and student loans. This can quickly get you into a mortgage catch-22: You need to refinance because your monthly payment is taking up too much of your budget, but you can’t refinance because your debt is too high to qualify.
Bank of America may allow you to refinance with a DTI ratio as high as 55% and a credit score as low as 600 points. Having trouble managing your mortgage loan and you have student loans or other debt? Qualifying for a loan can be easier with Bank of America.
- Easily accessible for customers across the United States
- Wide range of banking and loan solutions
- User-friendly online banking platform and mobile app
- Higher loan origination fees
- Lengthy application and approval process
5. Best for In-Person Service: Wells Fargo
If an online mortgage solution isn’t right for you, consider refinancing with Wells Fargo. Wells Fargo is one of the largest refinance mortgage lenders in the United States, with over 8,000 independent branches in operation.
At Wells Fargo, you can apply for a mortgage loan online, over the phone or in-person at one of its branches. You can also begin your mortgage loan online and finish out your application in person with a representative. If the comfort of a human helping hand is on top of your list of refinancing priorities, be sure to consider a refinance with Wells Fargo.
- Competitive interest rates and loan options
- Strong reputation and trust in the industry
- Wide range of mortgage products to choose from
- Limited availability in certain geographic areas
6. Best For On-Demand Customer Service: PNC Financial Services
In a world full of malfunctioning technology and confusing refinancing processes, it can be helpful to know that your new lender has a reliable customer service team on your side. If on-demand customer service is important to you, consider choosing PNC Financial Services for your loan.
PNC is one of the few refinancing companies to offer 24/7 customer support — so no matter when you have an issue, you’ll have a team ready to help.
- Competitive interest rates
- Wide range of mortgage options
- Convenient online application
- Strict qualification requirements
Why Should You Consider Refinancing Your Mortgage?
Refinancing your mortgage can offer a range of benefits for homeowners. Take a look at some of them:
Lower Interest Rates
Refinancing your mortgage allows you to take advantage of lower interest rates, which can result in significant savings over the life of your loan.
Reduce Monthly Payments
Refinancing can help you reduce your monthly mortgage payments by extending the loan term or securing a lower interest rate. This can free up cash that can be used for other expenses or savings.
Change Loan Terms
Refinancing provides an opportunity to change the terms of your mortgage, such as converting from an adjustable-rate mortgage to a fixed-rate mortgage. This can provide more stability and predictability in your monthly payments.
If your home has increased in value since you purchased it, refinancing allows you to tap into that equity. You can use the cash to finance home renovations, consolidate debt, or invest in other opportunities.
Switch to a Different Lender
Refinancing gives you the opportunity to switch lenders, which can result in better customer service, lower fees, or more favorable terms. It is a chance to explore different options and find the best fit for your financial needs.
Refinancing can be a quick and easy solution to many mortgage woes. You can refinance your interest rate to take advantage of lower current rates and save money over time. If you’re having trouble paying off your loan, you can lower your monthly payment by refinancing to a longer term. You can even take a portion of your built equity out of your home with a cash-out refinance. But who qualifies for a refinance?
There is no legal limit on the number of times that you can refinance. However, you do need to meet a few lender standards before you’ll qualify. Refinancing can be a quality financial instrument for the family, but you must take each refinance as its own event and prepare to explain why when you reach out to the mortgage refinance lender.
How Much You Can Refinance
Under most circumstances, your lender won’t allow you to refinance 100% of your home value. Yes, you can change the type of loan you have, but you cannot reach your financial goals if you can’t borrow enough money. The limit for refinancing is usually around 80% to 90% of your total loan value. This means that you’ll need to pay on your loan for a while before you can qualify for a refinance.
For example, let’s say that you bought a home worth $250,000 with a 3% down payment. When you take out your loan, you have a principal balance of $242,500. After a year of making payments on your loan, you may have paid down $2,500 of your principal balance through monthly payments.
You may decide you want to try a refinance option to get you out of the original mortgage. However, you only have 4% equity in your home at this point — which means that you’ll have a very difficult time finding a lender willing to service your loan. During the beginning of your loan, the vast majority of your monthly payment goes toward interest. This means that you might need to make payments on your loan for a few years before you can qualify for a refinance.
Meet Your Lender’s Standards
You’ll also need to meet your lender’s individual standards to qualify for a refinance. Each lender has its own standards for applicant’s debt, income, credit score and home value.
Your lender will ask you for a bit of personal information to get a better look at your financial situation. Your lender will typically ask you to share your last 2:
- Pay stubs
- W-2 forms
- Bank statements
You may need to provide additional documentation if you’re self-employed.
5 Tips for Finding the Best Refinance Mortgage Lender
So many companies offer refinances! How can you be sure that you’ve chosen the best mortgage company for your needs? Use these 5 tips to get the best refinance mortgage possible.
1. Check Your Credit Score
Your credit score plays a crucial role in the interest rates you’ll see when you shop for a loan. If you haven’t checked on your FICO credit score in a while, be sure to take a look before you apply for a refinance. If you’ve been paying your mortgage loan on time every month, chances are that your score has gone up since you took your loan out. After checking, you can begin working on your credit score, paying down debt and preparing for the loan.
2. Know Your Loan Stats
Your current loan balance and built equity will also affect the interest estimates you’ll receive when you shop. Contact your current mortgage lender and request information on your current loan balance and interest rate. This will give you an excellent jumping-off point to shop for a new loan.
3. Shop Around for Lenders
Don’t be afraid to take plenty of time to compare mortgage refinance lenders. Each lender charges its own set of fees and sets its own individual interest rates. Compare a few lenders and request custom quotes from each will help you find the most affordable refinance possible.
4. Browse by APR, Not Interest Rate
When you shop for refinances, you’ll typically see 2 different percentage rates listed: your interest rate and your annual percentage rate (APR). Your interest rate is the base interest rate you’ll pay on your loan, while your APR is your interest rate plus any annual fees included on your loan. Be sure you’re comparing APRs (not interest rates) when you consider each refinance lender.
5. Know How Much Cash You Need
Taking a cash-out refinance? Know exactly how much money you need before you apply for a new loan. Consolidating credit card debt? Add all of your balances together. Get an estimate from a contractor before you fund a major home improvement. The last thing you want is to be stuck with an incomplete bathroom renovation because you underestimated the price when you took a cash-out refinance.
Refinancing Made Simple
Refinance rates can change on a daily basis. This makes it particularly important to collect a few quotes before you apply for a new loan. Create a spreadsheet with lender information and a custom quote from each provider and be sure to update this information regularly. As you look for an affordable refinance, knowledge definitely is power.
Frequently Asked Questions
How much do you need to save for a down payment?
A down payment on a mortgage can range from 10% or 20% for a conventional mortgage, 3.5% for FHA loans or no down payment for USDA and VA loans.
What is a pre-approval?
A pre-approval is a good way to demonstrate to a seller or agent that you can afford a home and the lender has approved your loan up to a certain amount.
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.
You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.