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Variety of loan options and customizable loan term
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Simple online application process
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Multiple mortgage options, including low- and no-down-payment
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Excellent reputation for customer service
How to Choose the Best Mortgage Refinance Company
Select the best lender to refinance your mortgage by evaluating product options, interest rates and customer service ratings.
Product options: Look for a company that offers the type of loan you want, whether that’s a 15- or 30-year fixed-rate mortgage; an FHA, VA or USDA loan; an adjustable-rate mortgage; or a jumbo loan.
Mortgage refinance rates: Once you find the right product, you can start shopping for the right price. Prequalify with a few lenders to find out whether you meet the minimum credit criteria and compare mortgage rates. Compare annual percentage rates, which reflect interest and fees, for the true cost of borrowing.
Customer service: Read reviews, ratings and complaints to check that a company can offer good customer service. Check Better Business Bureau ratings and search the Consumer Financial Protection Bureau’s Consumer Complaint Database for common grievances about lenders.
How to Refinance Your Mortgage
When you’re ready to refinance your mortgage, start by making sure you have a clear goal, whether it is reducing your monthly payment or pulling out equity for home repairs. Next, check your credit score to see whether it is in the ballpark to qualify for the type of loan you want. The final steps are comparison shopping by getting preapproved, gathering documents and applying, preparing for appraisal, and getting your cash for closing if needed.
Alternatives to Mortgage Refinancing
- Mortgage recasting. A mortgage recast is when you put a large lump-sum payment toward your principal balance, which allows your lender to update your monthly payment for a fee.
- Loan modification. You may be able to extend your repayment term, reduce your interest rate or switch from an ARM to a fixed-rate loan through your current lender without going through the refinancing process.
- Home equity loan or line of credit. If you’re looking to tap into your home’s equity, you should also consider alternatives such as a HELOC or home equity loan.
Mortgage Refinance FAQs
The lender pays off your old home loan, and you begin making payments on your new mortgage.
To refinance your home, you’ll need to prove your creditworthiness and income as you would with any other mortgage. But refinancing adds another layer: home equity.
Before you apply for a refinance, put yourself in the best position to get a good interest rate and terms. Check your credit, and identify errors and areas for improvement. Pay down any balances, and correct mistakes on your credit report.
You can refinance with your current mortgage company if you’re happy with its service and it offers a competitive interest rate. It’s still important to make sure you thoroughly understand the terms of your new mortgage before you sign, though; just because you’ve had a good experience with your first mortgage through a certain lender doesn’t mean you shouldn’t research other options.
Technically, there’s no legal limit to the number of times you can refinance your mortgage, but lenders may have restrictions on how often you can refinance within a short period of time. Keep in mind the costs associated with refinancing.
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