Best Refinance Mortgage Lenders of 2020

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Who Are Our Top Mortgage Refinancing Lenders of 2020?

2020 has proven to be a fantastic year for refinance rates.  They are currently at the lowest they’ve been for years, so now could be the perfect time to refinance.  According to a Black Knight Mortgage Monitor Report, interest rates stand at 3.49% APR, which is 0.75% lower than last year.  Given this, if you took a mortgage out last year you may want to think about refinancing it this year. If you are looking to refinance to a lower rate or lower monthly payment, we can help find  you the best mortgage refinance lender for your unique situation. We’ve taken a stab at putting together the best lenders in a variety of categories that can help you through the refinance process.  Even though you’ve been through the home loan process, there are more refinance lenders and more loan options than we’ve seen previously. With mortgage interest rates at historically low levels, it appears to be a good time for borrowers to refinance their home loan.   Given that no mortgage refinance company is perfect for every single borrower, we’ve compiled a list of mortgage lenders spanning a variety of categories.  Below are the LowerMyBills picks for top mortgage lenders for 2020:

  • Quicken Loans
  • loanDepot
  • Amerisave
  • New American Funding
  • Rocket Mortgage
  • Better
  • NBKC
  • LenderFi
  • SoFi
  • Chase
  • Veterans United
  • Vylla
  • PNC Bank
  • Fairway Independent Mortgage
  • Bank of America
  • Alliant
  • Guild Mortgage Company

Quicken Loans

Quicken Loans is the largest online retail mortgage lender, according to National Mortgage News.  Quicken loans offers a wide variety of mortgage refinancing loan options that includes conventional loans, jumbo loans, ARM, VA FHA, and cash out refinance options.  Quicken Loans offers loans in all 50 states.   

Quicken offers a couple of unique mortgage offerings.  The first is the “YOURgage” loan by Quicken Loans. With this loan, they offer the ability for you to customize your mortgage based on your goals for fixed-rate conventional mortgages.  With this loan, you can pick any loan term between 8 and 30 years, refinance up to 97% of your home’s value or purchase a home with as little as 3% down. 

The second is the 1% down payment option where borrowers are able to only put 1% down on the house.   Only purchase loans are available for this option and the home must be a single-family home and a primary residence.  One requirement is that a borrower’s Debt-to-income ratio will need to be 45% or lower and first-time homebuyers to take an online introduction-to-homeownership course free of charge.

Additional benefits:

  • Refinancing for those with lower credit scores
  • Debt-to-income ratio is more lenient
  • A broad range of refinancing loans

loanDepot

loanDepot is a fast-growing mortgage lender. They also pride themselves on having personal support from professionals.

They offer:

  • They’ll work with those who have bad credit
  • Plenty of locations to have a face-to-face interaction
  • There are many refinance options to choose from
  • They have a technology that makes processing and closing a loan quicker

The cons are:

  • They’ll want a lot of personal information before finding out if you qualify
  • No USDA loans

AmeriSave 

Customers can apply for mortgage loans both online and over the phone, but don’t have a physical branch.  They offer rate & term refinancing to lower your current interest rate or change the term length of your mortgage, as well as cash out refinancing to get cash out of your home’s equity to use it or debt consolidation, home improvements and more. They offer a wide variety of loan products from Fannie Mae, USDA, FHA and VA loans.

New American Funding

New American Funding is licensed in 48 states and provides a variety of mortgages from fixed-rate, adjustable-rate, Jumbo, FHA, VA, USDA and Home Improvement loans.  One mortgage exclusive to New American Funding is the “I CAN Mortgage.” This a fixed-rate loan offer to help customers who are between loan types. This mortgage offers down payments as low as 5% and the flexibility to choose your loan term from 8 to 30 years.  This is only available to borrowers if their new home is a primary residence and single-family home.

The pros are:

  • Adjustable-rate loans
  • Fixed loan options

The cons are:

  • Not available in certain states
  • Fees are only shown when applying for a mortgage product

Rocket Mortgage 

Rocket Mortgage is a great option when you’re trying to refinance in little time. You can enjoy their smartphone app as well.

The pros are:

  • You’ll receive customized loan recommendations
  • Helpful mortgage bankers
  • Fills in your application automatically
  • Government-backed and conventional refinance mortgages

Better.com

Better is an excellent mortgage refinance option and is considered one of the best for refinancing overall. They take a look at your credit score, down payment, price of your home, and income.

The pros are:

  • You can be approved in minutes
  • An easy to read rates page
  • You choose which offer you’d like
  • Direct lender
  • Cutting out the middle man

The cons are:

  • Some have said funding can take a while
  • No USDA or VA loans
  • Not available everywhere
  • No home equity loans

NBKC

While you may have not heard of NBKC, it’s starting to be noticed as a highly rated refinance mortgage lender.

The pros:

  • Mobile apps for Android and iOS
  • Free rate locks
  • No lender for VA borrowers
  • Everything can be done electronically

The cons are:

  • Only in-person service is in Kansas City
  • An Origination fee for most
  • Not many choices for low credit-score borrowers

LenderFi

With LenderFi, you can enjoy quick loan processing online and normally no origination fees.

The pros are:

  • Most loans don’t have an origination fee
  • Loan officers are available by text and phone
  • Fast loan decision
  • Discount points
  • Interest rates to choose from

The cons are:

  • No traditional home equity loans
  • No home equity lines of credit
  • No loan options in certain states

SoFi

SoFi is another top refinance mortgage lender, with the option for some to just need a minimum equity of 10%.

The pros are:

  • Online prequalification, preapproval, and applications available
  • Discounted origination fees if you’re a member

The cons are:

  • No VA or FHA loans
  • Not available in all states
  • No physical locations

Chase

There are many options for refinancing mortgages through electronic submissions.

The pros are:

  • Numerous refinance and purchase options
  • You can track documents
  • Electronic submission option

The cons are:

  • Speak with a mortgage banker if you want full information on requirements and products
  • Rate lock charges
  • Origination fees
  • Underwriting fees

Veterans United

Veterans United is for America’s military community. Their specialty is VA loans.

The pros are:

  • You can choose FHA, conventional, and USDA loans
  • Available in all states
  • VA loan lender

The cons are:

  • Don’t have offices in many states

Vylla

Vylla prides itself on simplifying the process of refinancing your home with many options.

The pros are:

  • Multiple loan options
  • Accepts low credit scores
  • Low down payment options
  • Many ways to shop

The cons are:

  • Not completely online
  • Not available nationwide
  • Multiple online complaints

PNC Bank

When you’re looking for mortgage refinance lenders, PNC bank is great for those with low-moderate incomes or a limited down payment. They offer a low down payment option with no mortgage insurance.

The pros are:

  • There are many affordable loan options
  • PNC community loan
  • USDA, VA, FHA loans
  • Online tool estimators to estimate mortgage payments
  • Track your application progress
  • Might consider credit history like rent payments

Fairway Independent Mortgage

Fairway Independent Mortgage offers you:

  • A good mobile app
  • A portfolio of refinancing products
  • Loans
  • Phone access to advisers
  • Quick online processing

Unfortunately, you do have to give a lot of personal information before even receiving a refinance rate quote. They do have excellent customer service though.

Bank of America

Bank of America is great if you’re a borrower who is looking for multiple options. You can choose from VA, FHA, and cash-out.

The pros are:

  • You can customize refinanced rates without giving personal information
  • There are fee discounts for Preferred Rewards customers
  • You can apply to re-finance in-person, over the phone, or loan online

The cons are:

  • It can take longer to process and close a refinance
  • There have been some who say that there’s not consistent communication

Alliant

If you’re looking to save money then Alliant could be right for you. They have what’s called an Alliant Advantage Mortgage program (AAM). Through Alliant, you might be able to refinance to get rid of mortgage insurance with a low percentage of equity.

The pros are:

  • Excellent customer service
  • You have no-mortgage insurance refinance options
  • Mortgage management tools
  • Online banking

The cons are:

  • There’s only a physical location in Chicago
  • There are no USDA, VA, or FHA refinance options

Guild Mortgage Company

With Guild Mortgage Company, you can enjoy excellent customer service. Even though it’s smaller than Fairway and Quicken, it still has much to offer when it comes to refinancing your mortgage.

The pros are:

  • You can qualify with just a 580 credit score
  • They’ll consider alternative credit sources
  • They’re in most of the U.S.
  • Option to meet face-to-face in many states

The cons are:

  • It doesn’t offer jumbo loans
  • The lender fees tend to be higher than other lenders

Frequently Asked Questions

Learn the mortgage refinance basics

How does mortgage refinancing work?

A mortgage is essentially a loan from a lender that helps the borrower purchase real estate, where the property bought is used as collateral.  A mortgage refinance takes your current mortgage and trades it for a new loan. The lender then pays off the older mortgage and you make the payments on the new mortgage.  

Why should you refinance?

Take a look at why to refinance and your reasons for wanting to do so. Look at current interest rates, costs, and the time frame it’ll take you to own your property.   Make sure it makes sense financially because you might wind up paying more long-term if you’re refinancing for a better rate. Take a look at the different fees and costs that’ll be applied if you refinance.  Also, how much equity do you currently have in your home? How much interest have you already paid? How long do you have on your current mortgage?

While there are multiple reasons someone would choose refinancing a mortgage, it’s normally to save money.  You might want to shorten the term from 30-years to 15-years. This will have you pay more monthly even if you have a lower interest rate. It’ll decrease the amount of interest you pay over time since you’re paying it off quicker.

Another reason is to be done with mortgage insurance. When you don’t have the 20% necessary for the down payment, many mortgages will make you pay mortgage insurance to protect themselves in case you default on your payments.  Many look at the lower interest rates currently, and choose to refinance to save money. This will then lead to smaller payments every month.

Some decide to move forward with refinancing because they want to consolidate debt or do home improvements. If you have a good amount of equity built into your home, that’s cash that can be used as collateral for another loan.  This helps you pay off any debts or consolidate them.

Another reason to refinance is to remove or add a borrower. Whether it’s canceling a partnership, getting married, or getting a divorce, there are many reasons to head this route.

When does it make sense to refinance a mortgage?
  • To get a lower interest rate
  • To lower your monthly payment or pay less over the course of the loan
  • To shorten the loan term
  • To pay off your loan sooner
  • To change the loan types
  • Moving from an FHA loan to a conventional loan to remove mortgage insurance premiums
  • To change rate types
  • Avoiding higher interest rates before the end of the intro period
  • To take cash from your home equity
  • To pay for home improvements or consolidate your debt
  • To update a borrower
  • To add or remove a borrower based on a life event such as divorce or marriage
What are types of mortgage refinancing?

Conventional loans

  • usually have the hardest underwriting requirements

FHA loans

  • loans guaranteed by the federal government, reducing the risk to the lender and making them easier to qualify for than a conventional loan.  An FHA loan requires as little as 3.5% as a down payment

USDA loans

  • loans that help low to moderate income borrowers purchase homes in rural areas.

VA loans

  • loans that help service members, veterans, reserves or National Guard borrowers purchase homes with little or no down payment and no private mortgage insurance. 

Additional Programs

  • There is a refinance program called the IRRRL program (Interest Rate Reduction Refinance Loan) that allows those with a VA loan to refinance into a new VA loan.
  • Special mortgages may be available to residents of a particular state or city, or to individuals in certain professions, such as nurses, teachers, firefighters or police officers.
Are there additional costs to refinance mortgage?

Here is a good list of additional costs you can may incur throughout the mortgage refinance process:

  • Appraisal fee
  • Home Inspection
  • Flood determination assessment
  • Application fee:
  • Credit report fee
  • Origination fee
  • Attorney fees
  • Mortgage broker fee
  • Prepaid interest
  • Discount points
  • Lender’s policy title insurance
  • Owner’s policy title insurance
How long does it take to refinance a mortgage?

The process itself typically takes 30 to 45 days on average, though it can take up to 60 days in some instances.

Below are all the steps that go into the refinance process:

  • Preapproval
    • Finding out how much you can borrow through a conditional, non-binding offer from a lender
    • Application
    • Name
    • Address
    • Employer Name
    • Your Annual income
    • SSN
    • Property address (if different from your primary address)
    • Type of home (single-family, multi-family, condo, etc.)
    • Estimated property value
    • Any HOA fees
    • Total loan amount that you requested
  • Filling out a loan application that includes basic information such as:
    • Verified Documentation
    • Identity
    • Assets
    • Employment status
    • Income statements
  • With your application, you will need additional documents to verify your application such as:
    • Loan estimate
    • Lenders are required to give you an estimate of what your loan might cost upon verification of your loan application details.  This is to be provided within 3 business days of receiving this application.
    • Processing
    • Credit report
    • Appraisal
    • Report on the title
  • A mortgage processor will order the following:
    • Home Appraisal
    • Square Foot of Lot
    • Location
    • Amenities
    • Physical Condition
  • A professional appraiser will estimate the value of the property you are refinancing.  Some of the factors taken into account are the following:
    • Underwriting
    • An underwriter determines if the loan is accepted
    • Closing disclosure
    • Projected monthly payments
    • Closing costs
    • Loan term
  • Your lender is required to give you a closing disclosure within 3 business days of finalizing your loan.  This details the terms of your mortgage and includes:
    • Closing
    • You will sign the legally binding documents that make the mortgage official
What are loan terms?

Mortgage loan terms are the amount of time in which a borrower makes monthly payments toward a home loan with most being paid off in 15 or 30 years.  There are, however, other loan terms available. A rule of thumb is that borrowers will get a 15 year mortgage if they want to pay less in interest over the life of the loan and those that get a 30 year mortgage are looking for lower monthly payments.

What are interest rates?

Interest rates on mortgages are fixed or adjustable.  Fixed-rate loans allow you to pay the same interest rate through the life of the loan, so even if interest rates increase, your payment remains the same.  Adjustable-rate mortgages have an interest rates that changes with a benchmark rate like the prime rate. With an adjustable-rate, an intro interest rate is set for a period of time, after which the interest rate can go up or down. 

What is debt-to-income ratio?

This is the ratio of your monthly income divided by your monthly debt payments that includes the mortgage itself.  Typically, conventional loans can be approved with a DTI up to 49%.

What is the best interest rate you can get for a mortgage?

You need to factor in your debt-to-income ratio, your credit score, down payment and the loan size to truly understand what type of interest rate you can get.  You can also get lower interest rates by paying upfront for discount points that cost 1% of your total loan amount.

What are mortgage points?

These points allow you to pay an upfront fee to reduce your interest rate.  The more you pay upfront, the lower your monthly payments. These points are different than a down payment in that the down payment is applied to the principal whereas the points apply to the interest.  A down payment builds equity in your home while mortgage points don’t help you build equity, but helps with your monthly expenses.

What is a rate lock?

When you are approved for a mortgage or refinance, the lender will give you the option to lock in your interest rate at the time of your application.  This will ensure that if rates rise between the time of approval and the final underwriting, you will keep that rate. Sometimes you may have to pay a fee to lock your rate, but this depends on the lender.

What is private mortgage insurance?

Private Mortgage Insurance protects the borrower from liability if they fail to make payments.  Many lenders will require this if the borrower’s down payment is less than 20%. An FHA loan is a way to get around paying for PMI, as this only requires a 3.5% down payment.

Do pre-approvals affect your credit score?

A hard pull of your credit score does cause your score to dip a few points, but is required for pre-approval.  However, if you are shopping for a mortgage and more than one lender makes this hard inquiry within 45 days, they know you are looking for the best rate and the inquiries only count as a singular pull.

Which lenders offer the best mortgage and refinance deals?

The best mortgage or refinance lenders really depends on budget, location and if you like to conduct your business 100% online or with loan officers in person.  There are big banks that offer many types of loans and will service your loan without selling it off. Some of these banks offer discounts or credit card points for customers that take out mortgages with them.  Other lenders include small local lenders that are more familiar with the area and real estate in the area, whereas online lenders could give you better rates and lower fees due to lower overhead costs. Credit unions offer other advantages over banks and local lenders as their lending requirements aren’t as strict as a banks due to a typically more lenient income requirements. Credit unions often have lower fees and rates than other lenders as they are predominantly non-profit.  The downside to going through a credit union is that you have to be a member to borrow.

What credit is needed to get a mortgage?

Credit score is a huge factor for getting a mortgage or refinance and a 620 is generally looked at as the lowest acceptable FICO score for a conventional mortgage.  If your credit score has improved since you originally got your mortgage, you might consider refinancing as you have the potential to save on your monthly payments by getting a lower monthly payment.  

Who should I refinance my mortgage with?

Typically, to find the best mortgage lender you should compare multiple options that suit your financial situation.  Below are some factors you should consider as you go through the process of comparing lenders:

  • What are the financing options that the lender is offering?
  • What type of interest rates is the lender offering and are they competitive?
  • Are the closing costs reasonable compared to other lenders?
  • How is their customer service rating?
Are mortgage refinance costs tax deductible?

You can save money on your taxes by deducting some of the costs incurred during refinancing.  These costs include the following:

  • Mortgage Interest
    • You are able to deduct all mortgage interest you paid on the first $1 million of your home loan and interest paid on home equity or home improvement loans up to $100,000
  • Property Taxes
    • If you paid money toward property taxes at the closing of the refinance, you can deduct the amount you paid on your income tax return for that year.
  • Points
    • You can deduct any points you pay to lower your mortgage interest rate from your taxable income.  With refinancing, you will need to be sure to divide the points evenly over the loan term. For instance, if you paid $3,000 toward points on a 30 year loan, you can only deduct $100/year following your refinance.
When Is refinancing not a good idea?

A mortgage refinance is great for all the reasons outlined above, but there are times when it may be better to avoid refinancing and keep your current loan:

  • You’ve already paid most of the interest off and are building equity in your home
  • If there is a big prepayment penalty on your current mortgage
  • If the amount you will save is not as much as the fees you will pay to refinance
  • If you are looking to sell your home in the next few years (before you break even on the cost of refinancing)
What are additional refinancing costs?

If you decide to follow through with appraising your home, keep in mind that there will be many fees such as your property evaluation fees which can add up.
Some top mortgage refinance lenders may tell you property evaluation fees can include a flood determination assessment, appraisal fee, and inspection.

Property Evaluation Fees

If your lender requires an inspection, you’ll have to pay out of pocket for one. This can include a septic inspection, termite, water quality test, or a home inspection.

  • A flood determination assessment will tell you if your property is in a flood zone
  • If you go with the same lender as your original loan, you might not be required to have this assessment
  • An appraisal fee will protect the lender and ensure they don’t lend more than they need to for your home. This will be a professional assessment that you’ll normally have to pay for.

Loan Fees

  • Your loan fees can include your application fee, attorney fees, and others.
  • An application fee is where you’ll pay lenders a fee for taking a look at your application.
  • They can also charge you for what’s known as an origination fee. This is where you’ll pay for administrative costs for starting a new mortgage.

If you decide to go with a broker, you’ll have a mortgage broker fee. They’ll help you find the best mortgage for you. They can be part of your loan or part of the closing costs.

You’ll need to pay for an attorney if you hire one, who will review the terms of your mortgage agreement. It’s not required in every state, so speak with a lender to find out the requirements.

Another refinancing cost you may have to pay is prepaid interest. Once you close, interest on a mortgage begins to develop. Many lenders will ask you to pay the interest upfront.
If discount points are applied you’ll need to pay these as well. Discount points allow you to qualify for a lower interest rate.

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