The best mortgage refinance lenders of March 2021

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

The best mortgage refinance lenders of March 2021

Mortgage refinance lenderEditor’s rating (out of 5)Min. credit scoreNext steps
4.5620See rates
4.5660See rates
4.5620See rates
4.5600See rates
4.25640See rates
4.25620See rates
4.0620See rates
3.75660See rates
3.75620See rates
3.75640See rates
3.5620See rates
3.5620See rates

*Minimum credit scores are for conventional loans, or for VA loans from Navy Federal and Veterans United. 

Refinancing your mortgage can be a great way to secure a better interest rate, lower your monthly payments, or get rid of private mortgage insurance.

You don’t necessarily need to refinance with the same lender you used for your initial mortgage, though. You might find a better fit — and a better deal — with a different company this time around.

Popular Articles

Average 401(k) balance

We’ve chosen lenders that offer a variety of mortgages you can refinance into and have received an A- in trustworthiness from the Better Business Bureau, with the exception of Guild Mortgage, whose BBB profile is currently under review. Many of our top picks also thrive in customer satisfaction and accept alternative forms of credit if you don’t have a credit score, making it easier to qualify.

You may notice this list looks similar to our guide for the best mortgage lenders. In both cases, we chose lenders who are trustworthy, prioritize customer satisfaction, and make the process relatively affordable.

Learn more about the best mortgage refinance lenders

Editor’s rating4.5 / 5
Minimum credit score620
Types of mortgage refinancesConventional, FHA, VA, cash-out refinance
See rates from Rocket Mortgage

The pros of Rocket Mortgage:

  • You can choose from a variety of loan types.
  • It has ranked as the top lender for customer satisfaction from JD Power for 11 straight years.
  • The BBB gives it an A+ for trustworthiness.
  • The company provides a fast, easy online experience.

The cons of Rocket Mortgage:

  • You can’t refinance into a USDA loan.
  • Rocket Mortgage doesn’t accept alternative credit data.

Editor’s rating4.5 / 5
Minimum credit score660
Types of mortgage refinancesVA, cash-out refinance
See rates at Veterans United

The pros of Veterans United:

  • The lender has a high score in the JD Power 2020 Primary Mortgage Origination Satisfaction Survey (Veterans United doesn’t qualify to rank because it doesn’t meet certain criteria, but JD Power notes that the credit union would rank highly if it were eligible).
  • Veterans United has an A+ rating in trustworthiness from the BBB.
  • It accepts alternative forms of credit.
  • There are physical locations in 18 US states, but you can apply online from around the US.

The cons of Veterans United:

  • Although Veterans United is a strong choice for VA and cash-out refinances, it doesn’t offer conventional, FHA, or USDA refinances — although you can do a cash-out refinance for one of those mortgage types.
  • It might not be a good fit if you want to speak with someone face-to-face but don’t live in one of 18 states with a branch.

Editor’s rating4.5 / 5
Minimum credit score620
Types of mortgage refinancesConventional, FHA, VA, cash-out refinance
See rates from Fairway Independent

The pros of Fairway Independent:

  • You can refinance into a variety of mortgage types.
  • The BBB gives Fairway Independent an A+ in trustworthiness.
  • The lender accepts alternative forms of credit.
  • Its website is easy to navigate.

The cons of Fairway Independent:

  • You can’t refinance into a USDA loan.
  • Rates aren’t posted online.

Editor’s rating4.5 / 5
Minimum credit score600
Types of mortgage refinancesConventional, FHA, USDA, VA, cash-out refinance
See rates from Guild Mortgage

The pros of Guild Mortgage:

  • Guild Mortgage refinances a wide range of mortgage types.
  • You can submit alternative forms of credit.

The cons of Guild Mortgage:

  • No home equity loans, HELOCs, or construction loans.
  • It has a NR in trustworthiness from the BBB.
  • Mortgages are unavailable to residents of New Jersey or New York.
  • You may have to visit a physical branch for streamlined FHA, USDA, or VA refinances.

Editor’s rating4.25 / 5
Minimum credit score640
Types of mortgage refinancesConventional, FHA, VA, cash-out refinance
See rates from New American Funding

The pros of New American Funding:

  • You can refinance into several types of mortgages.
  • New American Funding has an A+ rating in trustworthiness from the BBB.
  • The lender accepts alternative forms of credit.

The cons of New American Funding:

  • No USDA streamline refinances are available.
  • Its minimum credit score for conventional loans is a little higher than with some of our other picks.
  • Residents of Hawaii can’t refinance with New American Funding.

Editor’s rating4.25 / 5
Minimum credit score620
Types of mortgage refinancesConventional, FHA, VA, USDA, cash-out refinance
See rates from PNC Bank

The pros of PNC Bank:

  • PNC offers a lot of mortgage refinance types.
  • The BBB gives PNC an A+ in trustworthiness.

The cons of PNC Bank:

  • The lender ranks about average in the JD Power 2020 Primary Mortgage Origination Satisfaction Survey.
  • It doesn’t accept alternative forms of credit.

Editor’s rating4 / 5
Minimum credit score620
Types of mortgage refinancesConventional, FHA, VA, cash-out refinance
See rates from NBKC

The pros of NBKC:

  • You have several choices for mortgage refinance types.
  • It has an A+ rating in trustworthiness from the BBB.
  • Live online chat makes it easy to speak with an expert about your questions.

The cons of NBKC:

  • You can’t refinance into a USDA loan.
  • NBKC doesn’t accept alternative forms of credit.

Editor’s rating3.75 / 5
Minimum credit score660
Minimum down payment0%
Types of mortgagesConventional, VA, cash-out refinance
See rates from Navy Federal Credit Union

The pros of Navy Federal:

  • Navy Federal has a high score in the JD Power 2020 Primary Mortgage Origination Satisfaction Survey (Navy Federal doesn’t qualify to rank because it doesn’t meet certain criteria, but JD Power notes that the credit union would rank highly if eligible).
  • It has an A+ rating in trustworthiness from the BBB.
  • The credit union accepts alternative credit data, such as utility bills.

The cons of Navy Federal:

  • You can’t refinance into an FHA or USDA mortgage.
  • You can only become a member of Navy Federal Credit Union if you or your family is affiliated with the military.

Editor’s rating3.75 / 5
Minimum credit score620
Types of mortgage refinancesConventional, FHA, VA, cash-out refinance
See rates from Chase

The pros of Chase:

  • Chase offers several types of mortgage refinances.
  • The lender ranks third in the JD Power 2020 Primary Mortgage Origination Satisfaction Survey.
  • It has an A- rating in trustworthiness from the BBB.

The cons of Chase:

  • You can’t refinance into a USDA loan.
  • It doesn’t accept alternative forms of credit.

Editor’s rating3.75 / 5
Minimum credit score640
Minimum down payment3%
Types of mortgagesConventional, FHA, USDA, VA, cash-out refinance, Carrington Flexible Advantage
See rates from Carrington Mortgage Services

The pros of Carrington:

  • Carrington has a variety of refinance options, including the Carrington Flexible Advantage Refinance, which has looser requirements for credit scores and doesn’t require mortgage insurance.
  • It has an A+ rating in trustworthiness from the BBB.
  • You can provide alternative forms of credit.

The cons of Carrington:

  • The minimum credit score for a conventional loan is a little higher than with some of our other picks.
  • You can’t apply for preapproval online.

Editor’s rating3.5 / 5
Minimum credit score620
Minimum down payment3%
Types of mortgage refinancesConventional, FHA, VA, cash-out refinance
See rates from Bank of America

The pros of Bank of America:

  • Bank of America gives you several refinance options.
  • The lender ranks second in the JD Power 2020 Primary Mortgage Origination Satisfaction Survey.
  • BBB gives the bank an A+ in trustworthiness.
  • You may receive a discount on fees if you’re already a Bank of America customer.

The cons of Bank of America:

  • USDA refinance mortgages aren’t available.
  • It doesn’t accept alternative forms of credit.

Editor’s rating3.5 / 5
Minimum credit score620
Types of mortgage refinancesConventional, FHA, VA, cash-out refinance
See rates from US Bank

The pros of US Bank:

  • US Bank offers a wide range of refinance loans.
  • It has an A+ rating in trustworthiness from the BBB.

The cons of US Bank:

  • You can’t refinance into a USDA loan.
  • US Bank ranks below the industry average in the JD Power 2020 Primary Mortgage Origination Satisfaction Survey.
  • It doesn’t accept alternative forms of credit.

Other mortgage refinance lenders we considered, and why they didn’t make the cut:

We looked at over two dozen mortgage lenders that refinance loans. Here are the ones we didn’t choose as our favorites:

  • USAA: This is a good option for refinancing VA or conventional loans, but because it only received an A- from the BBB, it might not be as strong an option as Navy Federal or Veterans United.
  • BB&T: BB&T’s website isn’t as easy to navigate as some of our top choices’ sites.
  • SunTrust: You might like refinancing with SunTrust, but it only has branches in the Southeast.
  • Regions: You might like using Regions, but the bank only has branches in certain parts of the US.
  • Citibank: This bank received decent customer satisfaction ratings from JD Power, but an F in trustworthiness from the BBB.
  • Wells Fargo: Due to some recent scandals, Wells Fargo has received an F in trustworthiness from the BBB.
  • Better.com: A good option if you want a to refinance into a conventional loan with an easy-to-use online lender, but Better.com doesn’t let you refinance into an FHA, USDA, or VA loans.
  • SoFi: SoFi is another worthwhile choice for conventional mortgages, but you can’t refinance into an FHA, USDA, or VA loan.
  • Freedom Mortgage: You can refinance into several types of mortgages with Freedom, but JD Power ranks it low for customer service.
  • Guaranteed Rate: You might like Guaranteed Rate, but it only has a B rating in trustworthiness.
  • Vylla: The BBB only gave Vylla an A- in trustworthiness.
  • Loan Depot: Loan Depot isn’t accredited by the BBB, and you can’t refinance into a USDA loan.
  • Fifth Third Bank: The lender doesn’t rank very highly on JD Power’s customer satisfaction survey, and there are no USDA loans.
  • Caliber Home Loans: You can find lenders with better customer satisfaction ratings from JD Power.
  • Paramount Bank: You might like Paramount as an online lender, but it doesn’t offer as many mortgage refinance types as our top picks.
  • Penny Mac: You can refinance into several types of loans with Penny Mac, but the lender ranks low on JD Power’s customer satisfaction survey.
  • Flagstar Bank: This bank has received an A+ from the BBB, but JD Power ranks it pretty low on customer satisfaction.
  • Alliant Credit Union: This is a good online lender, but you can’t refinance into FHA, VA, or USDA loans.
  • Mr. Cooper: This lender offers a few refinance options, but JD Power ranks it as about average for customer satisfaction.

Methodology

To choose the top mortgage refinance lenders of February 2021, we looked at four main factors:

  • Customer satisfaction. If the mortgage lender appeared in the JD Power 2020 Primary Mortgage Origination Satisfaction Survey, we looked at its ranking. If it wasn’t in the survey, then we read online customer reviews.
  • Ethics. Each of our top picks received an A- from the Better Business Bureau, which measures companies’ trustworthiness. The sole exception is Guild Mortgage, whose BBB profile is currently under review. We also researched and considered any scandals in the past three years.
  • Loan types. Does a lender offer several types of loan refinances to suit customers’ needs, including conventional loans, government-backed loans, and cash-out refinances?
  • Affordability. We looked at lenders’ minimum required credit scores. We also checked whether a lender lets you streamline from a government-backed loan into the same type of loan, which can be more affordable for borrowers with less-than-perfect financial profiles. Finally, we looked at whether it considers alternative forms of credit, like utility bills and rent payments, for you to qualify.

Frequently asked questions

What makes a mortgage refinance lender good?

A mortgage lender should offer the kind of mortgage refinance that best suits your needs. For example, if you already have an FHA loan, you might want to refinance into another FHA loan. 

A lender should be relatively affordable. You shouldn’t need a super-high credit score to get a loan. It should also offer good rates and charge reasonable fees.

You want a lender that’s known for high customer satisfaction, and one that’s trustworthy. That’s why we’ve looked at ratings from JD Power and the Better Business Bureau for each lender on our list.

Is it better to refinance with my current lender or with a new one?

It depends. If you value convenience, then you might prefer using your current lender. You’ll already know how the company works and be familiar with its customer service operations.

However, just because a lender offered the best rate or lowest fees when you got your initial mortgage doesn’t necessarily mean it will offer the best deal when you refinance. Your financial situation also may have changed since you got your first mortgage. For example, if your credit score has dropped, then you may need to find a lender that has a lower minimum credit score.

Which lenders offer the best mortgage refinance rates?

The answer could change by the day. Take a look at Insider’s daily mortgage and mortgage refinance rate updates to see the average rates for various term lengths. If you have a good financial profile but a lender is charging you a higher rate than today’s national average, you may want to look elsewhere.

But a low interest rate isn’t the only expense that matters. Ask lenders for an itemized list of fees. Comparing closing fees among lenders is another way to see which is offering the best deal.

How can I get a good rate on my new mortgage?

To secure a low rate, focus on three main factors: credit score, debt-to-income ratio, and home equity.

You’ll need a 620 credit score to get a conventional loan with most lenders, although some require higher. But the higher your score, the better rate you should get. To improve your credit score, focus on making payments on time, paying down debts, and letting your credit age if you aren’t in a rush to refinance.

Your debt-to-income ratio is the amount you pay toward debts each month, divided by your gross monthly income. Lenders typically want to see a debt-to-income ratio of 36% or less. To get a lower ratio, you either need to pay down debts or earn more.

The more equity you’ve built in your home, the lower your rate should be. Calculate your loan-to-value ratio, or how much you still owe versus how much your home is worth. Many lenders want you to have at least 20% equity, but you may be able to refinance with a lower percentage if you have a great credit score and low debt-to-income ratio.

Who are the worst mortgage lenders?

The worst lenders are ones with F ratings from the Better Business Bureau, because a bad score indicates a company isn’t trustworthy.

Get the latest Bank of America stock price here.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

Source: Read Full Article

Copyright © 2024