Best Mortgage Refinance Companies

ByTop10.com StaffDec.18, 2018
Refinance your mortgage
If you’ve been paying a mortgage for some time now and would like to get more favorable loan terms, then you may want to consider refinancing your mortgage. What does this mean exactly?

What Does it Mean to Refinance a Mortgage?

When you refinance a mortgage, you’re taking out a new loan which pays off your original mortgage and you are left to pay off the refinanced mortgage. Typically this mortgage will have better interest rates and other terms (otherwise there’s no sense in refinancing), so keeping up with the payments should be easier. 

How Does Refinancing a Mortgage Work?

Applying for a refinance is very similar to how you applied for the original loan. You’ll need to get all of your financial documents in order, and also get your home appraised and pay whatever closing costs are necessary to complete the process. 

In order to refinance, you will need to go through basically the same process as when you received the initial mortgage. You will need to have your home appraised, submit financial documents, and pay closing costs to complete the process. 

Why Refinance Your Mortgage? 

The main reason people refinance their mortgage is to get a new mortgage with better terms. This could mean lower interest, or a way to change from a fixed-rate to adjustable-rate mortgage. 

Another reason people refinance is as part of a cash-out refinancing. This is when you get a new mortgage that is significantly larger than your outstanding mortgage, and then use the difference as a source of cash flow. For instance, if you have $200,000 left on a $400,000 mortgage and you need $50,000 for some sort of expense, you would take a new loan for $250,000 and then “cash-out” the $50,000 to pay off other debts. 

What are the Top Mortgage Refinance Companies?


Minimum Credit ScoreMax DTI RatioFees

Lending Tree

Around 620, varies by lender

43% 

No fee from Lending Tree, final lender may have fees 

Credible

Depends on state, property, and equity

43% 

No fee from Credible, final lender may have fees

J.G. Wentworth

Around 620, as low as 520 for some

45%

Closing fees around 3%

Better Mortgage

620 

43%-47% 

None

CrossCountry Mortgage

580 

40% 

Various fees from origination to title fees

Lending Tree 

Pros 

  • Fill out one form and information is sent to multiple lenders
  • No fee from Lending Tree to use the service 

Cons 

  • High number of phone calls and emails you may receive after filling out the form
  • Rates are only shown after entering your Social Security number

Best for: Seeing a wide range of offers within moments 

LendingTree is one of the biggest names in the world of online lending, helping tens of millions of users get connected with lenders over the past two decades. 

The site has an easy-to-use interface, and while LendingTree doesn’t originate any loans on its own, all you have to do is just fill out a quick online form and you should be perusing competing offers from various lenders within moments. 

The credit limits on LendingTree aren’t set in stone—they’re up to the standards of the individual lenders you’re linked up with. 

For refinancing, you should be able to find lenders who can meet a wide variety of credit scores as well as debt-to-income ratios, and repayment terms that work for you. 

In addition, using LendingTree is free, and while you are likely to face closing costs with the lender you pick, you won’t have any hidden fees from LendingTree. 

Read this LendingTree review.

LendingTree LendingTree Get Rates

Credible

Pros 

  • Browsing for a loan won’t affect your credit score 
  • Your personal information isn’t sold 

Cons 

  • Retail banks are not included on the site 
  • No 24 hour customer service live chat 

Best for: Making hassle-free comparisons between lenders

Credible has a similar approach to LendingTree, in that it allows you to review offers from a variety of lenders within a matter of minutes, all from the comfort of your home. That said, the company does have a smaller selection of lenders than what you’ll find on LendingTree, and doesn’t include any retail banks. 

The selection of lenders includes some of the big names, like Quicken Loans and LoanDepot, and can include all types of loans, such as fixed-rate, adjustable-rate, and jumbo loans, to name a few. 

When you apply for a loan with Credible, all of the offers are displayed across an easy-to-read dashboard that shows the rates, terms, and fees from the various lenders. The entire process is paperless, as Credible has automated so much of the process of collecting documents. 

The company will provide you with mortgage refinance offers from up to 6 lenders, and can also facilitate student loan refinancing and personal loans. 

Read this Credible review.

Credible Credible Get Rates

J.G. Wentworth

Pros 

  • Quick and effective customer support 
  • Streamlined application, made easier with help of a loan officer 

Cons 

  • You can’t get rates without providing your contact details
  • No home equity loans 

Best for: Making hassle-free comparisons between lenders

J.G. Wentworth has spent more than 2 decades helping people get a handle on their finances, and as of 2015, has gotten into the mortgage game. 

The company provides a number of refinancing options, and can handle fixed-rate and adjustable-rate loans, as well as VA and Jumbo loans. 

The company operates an online service that can answer your needs, and if you’d like to deal with an in-person associate, there are also J.G. Wentworth storefronts in 15 states. 

With just your basic personal information you can easily get pre-approved online, and then a J.G. Wentworth agent will take it from there to see if you meet the company's requirements. This can take up to a few weeks, but the process should be quite painless. 

One thing to keep in mind though, while J.G. Wentworth has attractive interest rates of well below 5%, you can face closing costs that range from 2%-5%. 

Read this J.G. Wentworth review.

J.G. Wentworth J.G. Wentworth Get Rates

Better Mortgage 

Pros 

  • Fast approval process 
  • Promises to match competitors prices 

Cons 

  • Closing costs 
  • No FHA, VA, or USDA loans 

Best for: Using a hassle-free automated lending process

Better mortgages has created an automated lending process that helps users find loans, with matches in a matter of minutes. 

The company doesn’t charge any origination fees, lender fees, or commissions, and you can always pay the mortgage off early and not face prepayment penalties. The company doesn’t offer any HELOC, FHA, or USDA loans, though, so it is a bit more limited than much of the competition. 

If you’re looking to refinance, Better says you can apply in as little as 3 minutes. You’ll just need to have some equity in the property. Just enter in some basic details and you’ll be sent an estimate and matched with a loan officer who can walk you through the process. Usually, customers can get from their initial query to a locked in mortgage in as little as 3-6 weeks. 

You will need to have a credit score of at least 620, which, while higher than the requirements of some companies, is still pretty average for the industry. 

Read this Better review.

Better Mortgage Better Mortgage Get Rates

CrossCountry Mortgage

Pros 

  • Every customer gets a dedicated loan officer 
  • Low credit requirement (580)

Cons 

  • Insurance required for loans with no down payment 
  • No live chat customer service

Best for: First-time home buyers and people who might not have great credit

CrossCountry is licensed to provide refinancing in all 50 states and is a sound option for first-time home buyers, including ones who only have a credit score of 580. 

When you apply for a loan with CrossCountry you will be assigned a dedicated loan officer to help you with the process, which is no small thing if you’re a first-time home buyer or just someone who doesn’t have a lot of experience with lending. 

Every loan comes with an offer for mortgage insurance, but it’s not required for all loans. The company can provide VA, USDA, and FHA loans as well, and if you qualify, this is a great way to get a low- or no-down-payment loan. 

With CrossCountry you’ll find a wide range of loan terms between 10 to 30 years, and most likely with terms that can fit your budget. 

Read this CrossCountry review.

Cross Country Cross Country Get Rates

How to Choose the Best Company for You

1) First things first, you should get all of your personal paperwork together.

Get a sense of where you stand. This includes your credit score, income-to-debt ratio, and income, which you can use to get preapproved for a loan or just to get an idea of what your options are when you start shopping around with different lenders. 

2) Your next move should be to read up on all the different lenders you’re considering. 

Do they have a good reputation? Do they provide reliable customer service? Will they provide you with your own loan advisor who can walk you through the process? Make sure to take a long, hard look at how the company has performed and the reputation it has accrued with consumers. 

3) You would also be wise to closely examine your own budget. 

Calibrate how much you could pay each month on your mortgage refinance loan, and whether a 15- or 30-year fixed- (or variable-) rate mortgage makes more economic sense to you. If you’re doing a cash-out refinance in order to renovate a home for the real estate market, take a look at how prices are doing in your locale, so you can get an idea of how much sense it makes money-wise.  

4) You’ll also need to take into account any and all fees that may be included in the loan. 

These could be origination fees and closing fees, among others, so make sure you read the fine print and factor in those costs. 

How Do You Get the Best Rates?

The rate you receive will be based predominantly on your credit rating and credit history. Typically the better your credit rating, the better interest rate and APR on the loan. If the rates you’re being quoted aren’t good enough for the refinance to make economic sense at the time, then it may be a better idea to shore up your credit rating and wait until a later date. 

How Much Does it Cost to Refinance a Mortgage?

There are a number of costs you need to factor in when deciding whether refinancing your mortgage makes sense. These include the application fee, broker fees, origination fees, and more. 

These can really add up, so take a look at the following costs:

FeesAmount

Application fee

$200 to $250

Appraisal report

$300 to $600

Loan origination and document prep fee

1% of the loan value 

Title search

$200 to $400

Title insurance

$400 to $800

City recording fee

$25 to $250

Flood certification 

$50 to $150

How Can You Refinance with Bad Credit?

Poor credit can be a hurdle if you’re trying to refinance your mortgage with better terms, but it doesn’t have to be a deal-breaker. Because you’re using your house as collateral, you should be able to get a refinance with bad credit, just maybe not with the best terms. 

  • Show documentation to the lender that proves your reliability. 

These could include proof of job consistency, any savings or assets you may have, and proof that you’ve made your payments on previous debts on time. 

  • Look at government loans 

Loan through the Department of Housing and Urban Development, the VA, or at HARP and FHA loans. 

  • Look at your options for using a co-signer

A co-signer with better credit who can get on the loan will help you get better terms. 

What are the Requirements for Refinancing

Any lender is going to want to know that you can keep up with your payments and that you’ve done so on your previous loan before they approve a mortgage refinance. The lender may also require a minimum loan-to-income ratio on your part, meaning that the loan payment will not exceed a certain percentage of your monthly income. 

By the time you refinance you should have already built up some equity in your home, and the loan you apply for should be smaller than the value of the property, typically by about 80%. 

The 6 Steps to Refinancing Your Mortgage

Just to recap, let’s break down mortgage refinancing step-by-step. 

Step 1: Crunch the numbers and see if it's cost effective. 

See if the costs and fees and the loan terms will actually make mortgage refinancing a better deal and one worth pursuing. 

Step 2: Use a mortgage refinance calculator.

These are always a fun tool that you can use to see the exact figures you can expect to pay month after month, year after year with your loan. Take the guesswork out of your mortgage refinance calculations. 

Step 3: Look into government programs for refinancing.

You may qualify for a HARP refinance loan, which can be of great assistance if you’re having trouble making your payments. 

Step 4: Shop around.

The last thing you want to do is to accept the very first mortgage refinance offer. Make sure to look at multiple lenders and compare the offers side to side across all variables. Look at your expenses and which offer makes the best sense for you. 

Step 5: Have cash on hand.

Make sure that from the get-go you have the cash on hand to pay for property taxes, insurance, closing costs, lawyers fees, and any other fees that you may have to pay upfront when you take out the mortgage refinance loan. 

Step 6: Prepare for closing. 

Bring all documents and ID and whatever money you need for fees. You have a 3-day right of cancel, should you decide this loan is not right for you.

So, Should you Refinance Your Mortgage Loan?

Whether or not you decided to go for a mortgage refinance is a personal decision based on your monthly budget and your financial needs going forward. A mortgage refinance can be a great way to use the equity on your home to get better terms on your loan, and also to cash-out and get some much needed cash flow to pay for other debts. If the numbers make sense for your pocketbook, then a mortgage refinance can be a great step in the right direction.