Are you having trouble managing your mortgage, credit card debt or student loan payments? It might be time to consider a refinance. If you’re a California resident who wants to learn more about the benefits of refinancing, be sure to read more about our picks for the best refinance mortgage companies in the Golden State.
Best Refinance Lenders in California:
- Best for Easy Refinances: Rocket Mortgage®
- Best for VA Streamline Refinances: Veterans United
- Best for Competitive Rates: better.com
- Best for Special Situations: Flagstar
- Best for In-Person Service: Wells Fargo
Best Mortgage Lenders to Refinance in California
Thinking about pursuing a refinance in California? Here are some of our favorite refinance companies.
1. Rocket Mortgage®: Best for Easy Refinancing
If you had a tough time getting a mortgage loan, you might be dreading going through the process to refinance a mortgage. Rocket Mortgage® can be one of the best places to refinance a mortgage if you’re looking for a simple application process. You can apply for your new loan in as little as 30 minutes from your phone. In most cases, you’ll receive an instant decision on your new loan — no need to wait by the phone for weeks on end for a representative to call.
Rocket Mortgage® offers refinancing for almost every type of loan. From jumbo loan refinancing to VA refinancing, Rocket Mortgage® can service almost every type of loan.
2. Veterans United: Best for VA Streamline Refinancing
If you have a VA loan and you want to refinance your rate or term, a VA Interest Rate Reduction Refinance Loan (IRRRL) might be right for you. A VA IRRRL allows you to refinance to a lower interest rate faster and with less paperwork than a standard refinance. You can also roll your closing costs into your loan’s principal balance with a VA IRRRL.
If you’re considering a VA IRRRL, you may want to work with Veterans United. Veterans United doesn’t require an appraisal for most VA IRRRLs and it also allows you to pay nothing at closing with a no-closing-cost refinance. Veterans United employs a full team of former service members from all branches of the military so you’ll receive reliable and personal service when you get your loan.
In addition to VA IRRRLs, Veterans United also offers standard VA loan refinancing. The company also services both conventional and VA mortgages.
3. better.com: Best for Low-Interest Rates
Interest rates can change on a day-to-day and even hour-to-hour basis. It can be difficult to be sure that you’re getting the best rates when you compare refinancing companies.
When you refinance with better.com, you can rest assured that you’re receiving the lowest APR possible. better.com is a unique online mortgage company that streamlines the refinancing process, passing the savings along to you. In our review, Better.com had some of the most consistently affordable rates when compared to other mortgage companies. It even offers a Better Price Guarantee — if you find a better rate from another mortgage company, better.com will beat it.
In addition to refinances, Better.com also services conventional and FHA mortgage loans.
4. Flagstar: Best for Unique Financial Situations
If you’re self-employed or you’ve just graduated from a professional school (like law school or medical school), you might have trouble finding a refinance. Refinance companies typically look at your income and debt in isolation from the bigger picture of your career trajectory, which can be hard on business owners or recent college graduates.
Flagstar specializes in more personalized refinances. The company’s team of “financial craftsmen” will take a closer look at your financial situation as a whole instead of just looking at the numbers. Flagstar can be the best mortgage company for you if you have a unique financial situation that requires a more nuanced look.
In addition to refinances, Flagstar also offers a wide range of personalized conventional, jumbo and FHA loans. It also offers other types of financial products, ranging from savings accounts to personal loans.
5. Wells Fargo: Best for In-Person Service
Online mortgage companies can be a convenient way to adjust your loan with a refinance. However, if you’re less technologically proficient, you might want the comfort of working with a traditional bank.
As a resident of California, you can quickly get a refinance in person through Wells Fargo. Wells Fargo is the largest bank in California with almost 1,000 branches across the Golden State. You can begin your application online and finish it at one of Wells Fargo’s branches as well if you prefer. Wells Fargo also offers 24/7 customer service. No matter when you have an issue, Wells Fargo can be there.
In addition to refinancing services, Wells Fargo also offers banking services and services both conventional loans and government-backed mortgage loans.
Current California Refinance Rates
Interest rates change on a daily (and sometimes hourly) basis. If you’re looking to refinance to a lower rate, you should keep track of interest rates and how they’re changing in your area. Let’s take a look at a few of the average APRs currently being offered on 30-year conventional refinances by a few of California’s top mortgage lenders.
|Mortgage Company||Current Refinance Rate|
|Wells Fargo||3.719% APR|
|Rocket Mortgage®||4.013% APR|
|Veterans United||3.538% APR|
*rates as of 2/13/20, to see the most up-to-date refinance rates, click here.
When Should You Refinance in California?
Deciding when to refinance can be just as important as the company you choose to work with. How can you decide if you should refinance now or wait? Let’s take a look at a few of the factors that you should consider before you begin the refinance process.
Your Home Equity
Equity refers to the percentage of your home that you actually own. For example, if you borrow $200,000 to buy a home and you pay $20,000 off your principal balance, you have 10% equity in your home.
Most refinance lenders won’t allow you to refinance more than 80-90% of your loan value. This means that in most circumstances, you’ll need to already have at least 10% equity in your home before you qualify to get a refinance. Your lender might require you to have even more equity if you want to take a cash-out refinance, a special type of refinance that allows you to withdraw a percentage of your home’s equity in cash.
If you’ve been paying on your loan for more than a few years and you had some form of a down payment when you took out your mortgage loan, you probably have a sizable amount of equity in your home. Double-check with your current lender before you apply for a refinance. Contact your mortgage company and request a mortgage statement. Your statement will tell you what percentage of your principal balance you’ve paid off. If you have less than 10% equity in your home, you’ll have a harder time finding a mortgage company willing to service your refinance.
Current Interest Rates
Refinancing to a lower interest rate is an excellent way to save money on your home loan. Refinancing to a rate that’s even a fraction of a percent lower can leave you with thousands of extra dollars in the bank by the time you own your home.
Let’s take a look at an example. Let’s say you currently have a mortgage loan with a principal balance of $200,000, 20 years left on its term and an APR of 4%. A lender offers to refinance your loan to the same term but with an interest rate of 3.6%. If you take the refinance, you’ll pay your lender $80,853.49 in interest by the time you make your last loan payment.
If you don’t take the refinance, you’ll pay your current lender $90,870.57 by the time your loan matures. Refinancing with the exact same term saves you about $10,000. You’ll also pay about $40 less every month, which can be especially helpful if you’re living on a tight budget.
Interest rates change throughout the year. Begin by requesting a mortgage statement from your lender so you know your current APR. Check in with rates every few months. Most mortgage companies allow you to view current rates after entering just a little information on your loan and your financial situation.
When you shop for a refinance, you’ll notice 2 rates listed side-by-side: interest rate and APR. An interest rate is the base rate of interest you’ll pay to your lender, while your APR is your interest rate plus the fees associated with your new loan. Remember to always compare APRs — not interest rates — when you shop for a loan because the APR is the rate that you actually pay.
Refinance Your Home Loan Your Way
Are you ready to begin your refinance? The key to successfully and affordably adjusting your home loan to fit your needs is doing plenty of research. Don’t be afraid to schedule meetings or phone calls with representatives from multiple refinancing companies — you don’t need to work with the first mortgage company you speak to or even your current lender. Avoid committing to a refinance until you find the company, interest rate and loan option that’s right for you and your family.
Frequently Asked Questions
1) Q: How do I get pre-approved?
First, you need to fill out an application and submit it to the lender of your choice. For the application you need 2 previous years of tax returns including your W-2’s, your pay stub for past month, 2 months worth of bank statements and the lender will run your credit report. Once the application is submitted and processed it takes anywhere from 2-7 days to be approved or denied. Check out our top lenders and lock in your rate today!
2) Q: How much interest will I pay?
Interest that you’ll pay is based on the interest rate that you received at the time of loan origination, how much you borrowed and the term of the loan. If you borrow $208,800 at 3.62% then over the course of a 30-year loan you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you are looking to refinance you can get started quickly here.
3) Q: How much should I save for a down payment?
Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you put down, the lower your monthly payment will be and ultimately you will save on interest costs as well. In the event that you are unable to save 20% there are several home buyer programs and assistance, especially for first time buyers. Check out the lenders that specialize in making the home buying experience a breeze.