Do you feel trapped in a mortgage loan that you can no longer afford? Do you want to adjust your monthly payment or pay off credit card debt without selling your home? Our guide to refinances in Maryland can help you decide if a refinance is right for your unique situation.
Best Refinance Lenders in Maryland
The best mortgage company to handle your refinance may vary depending on current rates and fees, the type of loan you need and the specific part of Maryland you live in. If you aren’t satisfied with your current lender, consider working with one of our favorite Maryland lenders below.
If you already own a home, Figure may be able to help you access your equity or improve your loan terms. You can get a HELOC or mortgage refinancing if you live in any of the states it serves. (It offers service to more than 30 states.) Its simple application and speedy platform make it a great option if it’s available in your state.
- Current homeowners with equity
- Borrowers looking for a HELOC or mortgage refinancing
- Borrowers with a credit score of 620 or higher (720 in Oklahoma)
- Funding in as few as 5 days on its HELOC product*
- Digital application
- Competitive rates
- Not available in all states
Morty is a mortgage broker that uses technology to speed up the loan process. While it has limited mortgage options and a relatively high minimum credit score requirement, its competitive rates and transparent process make it worth considering if you meet the criteria.
- Those with good credit
- Conventional loan borrowers
- Primary residence borrowers
- Competitive rates
- Fast, verified preapproval
- Expedited closing with clear instructions
- Only offers conventional loans
- Not available in 15 states
Luxury Mortgage offers standard products like conventional loans, VA loans, Jumbo loans and FHA loans. It also has more specialized products like bank statement loans, asset qualifier mortgages and no doc investment property loans. If you’ve had a hard time finding a mortgage due to erratic income, being retired or buying an investment property, Luxury Mortgage is worth a look.
- Self-employed professionals
- Condo buyers
- Wide variety of mortgage products
- Niche products like bank statement loans
- Works with many state home buyer assistance programs
- Only available in 29 states
Quicken Loans® offers award-winning customer service for both originating and servicing mortgages. This means you’re taken care of at every step of the mortgage process. Quicken Loans® offers a range of mortgage products. You can apply for its loans from the comfort of your home by phone or online through Rocket Mortgage® by Quicken Loans®.
- People who prefer online service
- People who want a range of home loan options
- People who want to refinance
- Extensive customer service availability
- Government-backed and conventional loan options for home buyers
- Works with investors and people buying second homes
- No in-person service options
- No home equity loans or lines of credit
Current Maryland Refinance Rates
The best place to refinance your mortgage might change throughout the year depending on which lenders offer low interest rates. Just a small percentage change in your interest loan can mean thousands more dollars saved (or spent) by the time your loan matures and you fully own your home.
It’s worth the effort to track how refinance rates in Maryland are changing and to lock into your new loan at the lowest rate possible. Check out the table below to learn a little more about what you might pay for your refinance if you took it out today. We update this table on an ongoing basis to ensure that the data you see is current.
|7/1 ARM (adjustable rate)||N/A||N/A|
|5/1 ARM (adjustable rate)||2.162%||2.816%|
If you’re intimidated by the refinance process, it can be helpful to know what to expect. Most homeowners find refinancing their loans to be much easier than applying for a new mortgage loan. Follow these simple steps to complete your mortgage refinance without stress.
Step 1: Determine Your Goals
When you decide to refinance a mortgage, you first need to decide what you’d like to get out of your new loan. There are 2 major types of refinances:
- Rate or term refinance: As the name suggests, a rate or term refinance adjusts your mortgage term or interest rate. You can make your term longer or shorter, depending on your needs. If you refinance your interest rate, your lender will offer you a rate that’s in line with current market rates.
- Cash-out refinance: When you take a cash-out refinance, you accept a loan with a higher principal balance. In exchange, your mortgage lender gives you a portion of your home’s equity in cash. For example, if you had a mortgage loan with a principal balance of $100,000 and you needed $10,000 to pay off a medical bill, you’d sign onto a new loan with a balance of $110,000. Your lender would then provide you with $10,000 in cash a few days after closing.
You can also refinance to a new loan type. Many homeowners refinance from an FHA loan to a conventional loan to get rid of their FHA insurance payment requirement.
Step 2: Apply
After you decide which type of refinance you want, you’ll apply for a new loan with your current lender or a new lender. If you decide to switch lenders, be sure to do your homework and choose a lender that offers your preferred loan type and term. For an easy and simple refinance, consider choosing Quicken Loans’ Rocket Mortgage platform, which offers a streamlined and 100% online application process.
When you apply, your lender will ask you for a few documents to prove your income. Be prepared to send W-2 forms, bank statements and pay stubs from the past 2 years. If you’re self-employed, your lender might ask you to provide your full tax return.
Step 3: Appraisal and Underwriting
When you submit your application to your lender, it’ll begin the underwriting process. This usually starts with a new home appraisal. Unlike when you bought your home, you may be present for your refinance appraisal to ensure the highest possible estimate. Here are a few steps you can take in the days before your appraiser arrives to improve your home value:
- Create a list of upgrades. If you’ve made renovations or repairs to your property since you moved in, create a list of them for your appraiser. Don’t be afraid to point out new permanent changes or appliances as your appraiser tours your property.
- Make any last-minute repairs. If you have tiny repairs hanging around your to-do list, be sure to have them completed before your refinance. Unclogging a drain or repairing a lighting fixture can take as little as 1 hour — but may have a major effect on your home’s evaluation.
- Tidy up. Your appraiser won’t deduct points if your home is a little messy. However, clutter can make it more difficult to assess the true condition of your home. Deep clean your home before your appraiser arrives and be sure to put pets in their crate or cage the day of the appraisal to avoid any unnecessary distractions.
While you’re waiting on your appraisal, your lender will underwrite your loan. This will involve running a credit check, verifying your assets and drawing up your new loan paperwork. Once everything has been completed, your lender will send you a document called a Closing Disclosure with the details of your new loan.
Step 4: Close on Your New Loan
After receiving your Closing Disclosure, be sure to tell your lender you’ve had a chance to read it. Your lender is legally obligated to provide you with at least 3 days to review your Closing Disclosure before you can close on your new loan, so forgetting to tell your lender that you’ve gotten your Closing Disclosure can slow down your refinance.
Your lender will then schedule your closing meeting. At closing, you’ll sign on your new loan and ask any final questions you have for your lender. You’ll also pay your closing costs, if applicable.
When Should You Refinance in Maryland?
There are many reasons why you might want to refinance your mortgage loan. Let’s take a look at some situations when refinancing makes sense.
- You need a lower monthly payment. Refinancing to a longer mortgage term gives you more months to pay off your loan. This lowers what you’re required to pay each month.
- You want to get rid of FHA insurance. Unlike the private mortgage insurance (PMI) on conventional mortgage loans, you cannot cancel your monthly FHA insurance payments. However, there is an easy workaround — refinance to a conventional loan once you have 20% equity in your property.
- Mortgage interest rates are low. Online mortgage lenders have made it easy to quickly compare and track mortgage rates and how they’re changing over time. If interest rates are much lower now than they were when you took out your original loan, you can save money each month by refinancing to a lower rate.
- You have high-interest debt to pay off. The average mortgage loan currently has an interest rate of around 4%. On the other hand, credit cards usually have an interest rate between 15% and 27%. If you have credit card charges racking up interest, a cash-out refinance can be a more affordable way to manage your debt.
When Should You Not Refinance?
Refinancing isn’t right for everyone. If any of the following apply to you, you may not want to refinance at this time.
- You plan to sell your home soon. The longer you have your mortgage loan, the more benefits you’ll see from your refinance. If you’re planning to sell your home in the next few years, the amount of money you pay in closing costs on your refinance might cancel out any benefit you take from your new loan.
- You don’t have at least 20% equity in your home on an FHA loan. If you have less than 20% equity in your property and you refinance to a conventional loan, your lender will require you to pay for monthly PMI. PMI is often significantly more expensive than FHA insurance — wait until you have at least 20% equity before you refinance.
- You want a higher monthly payment. You can choose to refinance to a shorter loan to increase your monthly payment and own your home sooner. However, many lenders also allow you to make additional monthly payments to your principal balance with no penalties. Contact your lender to set up extra monthly payments in addition to your standard payments. Be sure to specify that you want the extra money to go toward your principal balance. Some lenders will automatically apply any extra funds to your next month’s payment.
Bad Credit Refinance
If you have a credit score below 620 points, you might have a harder time finding a lender to give you a refinance. However, though refinancing with bad credit is difficult, it’s not impossible.
If you have an FHA loan, you may want to consider applying for an FHA streamline refinance. FHA streamline refinances are expedited refinances that allow you to adjust your loan’s rate or term without a credit check or appraisal. To qualify for an FHA streamline, all of the following conditions must be true:
- You already have an FHA loan.
- You’ve made your last 12 mortgage loan payments on schedule.
- You’ll see a tangible benefit from your refinance (for example, a lower interest rate or monthly payment) and your monthly payment cannot increase by more than $50.
- You’re only refinancing your rate or term (no cash-out refinances).
The VA version of the FHA streamline refinance is the VA interest rate reduction loan (VA IRRRL). Like an FHA loan, a VA IRRRL is a faster refinance that allows you to skip the credit check requirement. To qualify for a VA IRRRL, all of the following must be true:
- You already have a VA loan.
- There have been at least 270 days since you closed on your original mortgage loan.
- You’ve made your last 6 loan payments on schedule.
- You’re only refinancing your rate or term.
If you have a conventional mortgage loan, you may want to consider refinancing with a non-occupying co-client. A non-occupying co-client is someone who signs onto your refinance loan without living in your home. If you fail to pay back your loan, your co-client becomes responsible for the loan. If you know you can make your new payments on time and you have a friend or family member with excellent credit, consider asking them to be a co-client on your loan.
Refinancing with Confidence
The key to a successful refinance is taking plenty of time to do your homework before you apply for your new loan. Don’t be afraid to take plenty of time, watch interest rates and speak with multiple lenders before you decide where to refinance. The best refinance mortgage companies will be happy to help you explore all of your options and decide if a refinance is the right route for you.
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by 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.