3 Best Mortgage Refinance Companies New york – September 2022

Refinancing your mortgage is one way to improve your financial position, but for the move to make sense you need to first find the right lender. The best refinance companies will offer competitive interest rates, a smooth application process and a variety of loan options to choose from.

First, use Money’s mortgage refinance calculator to easily estimate how much you can save by reducing the interest rate on your home loan. Then, to find the right loan for you, compare offers from multiple lenders. We think these eight mortgage lenders are the best place to start.

Our Top Picks for the Best Mortgage Refinance Companies / Lenders of September 2022

• Rocket Mortgage – Best Refinance Lender Overall
• loanDepot – Best for Online Mortgage Refinancing
• Zillow – Best Marketplace
• Better – Best for Fast Closing Time
• Navy Federal Credit Union – Best Credit Union
• Ally Financial – Best for Jumbo Loans
• Nationwide – Best for Borrowers with Poor Credit
• Bank of America – Best for Member Discounts

Best Mortgage Refinance Reviews

Why we chose it: We chose Rocket Mortgage (formerly Quicken Loans) as the best overall mortgage refinance company for its excellent track record in customer satisfaction and web-based customer support. In 2021, Rocket originated more mortgages than any other company in the United States.

PROS

• Rated best mortgage servicer by JD Power
• Largest mortgage originator in 2021
• Streamlined online application process with eClosing
• Features a mortgage refinance rates calculator

CONS

• No in-person service, but you may reach out to an affiliated broker

HIGHLIGHTS

J.D. Power Rating

876/1000

NMLS Regulatory Actions

8

Min. Credit Score

620 (580 for FHA)

Refi Loan Types

15- and 30-year Conventional, ARM, FHA, VA, Jumbo

Rocket Mortgage (NMLS ID# 3030) has ranked in the top 3 in the J.D. Power U.S Primary Mortgage Origination Satisfaction Study for eight consecutive years. Although the company is deeply rooted in online technology, it also has over 3,000 home loan experts available seven days a week to help you complete your application over the phone.

Rocket Mortgage is one of the lenders that offer Fannie Mae’s RefiNow and Freddie Mac’s Refi Possible refinance options for those with a debt-to-income ratio of up to 65% who currently have a mortgage with either one of the government-sponsored enterprises. Homeowners who qualify for these programs will see a reduction of at least 0.5% of their interest rate and can also take advantage of up to $500 to cover appraisal costs. To qualify, the homeowner must have a good payment history, a FICO credit score of 620 or higher, and at least 3% equity in a one-unit primary residence.

Why we chose it: We chose loanDepot as the best online mortgage refinance company due to its wide availability across the U.S.

PROS

• Licensed in all 50 states with over 200 locations in 43 states
• Streamlined digital platform

CONS

• Loan rates are not available online

HIGHLIGHTS

J.D. Power Rating

856/1000

NMLS Regulatory Actions

3

Min. Credit Score

620 (580 for FHA)

Refi Loan Types

Conventional, fixed-rate, ARM, VA, FHA, HARP

loanDepot (NMLS# 174457) stands out for its “mello smartloan,” an end-to-end digital portal that uses artificial intelligence to verify asset and employment details and can also perform credit checks and begin the home appraisal process.

Choosing loanDepot for a mortgage refinance comes with some perks, the company offers to waive lender fees and reimburse appraisal fees on future refinances after you’ve refinanced with them at least once.

Why we chose it: We chose Zillow as the best mortgage refinancing marketplace for its ability to connect you with a wide variety of licensed lenders located across all 50 states and the District of Columbia, plus its array of tools that help the homeowner determine the best refinancing option.

PROS

• User-friendly mobile app
• Wide range of online resources, including a mortgage calculator
• Easy access to competitive rates, updated daily
• Most of the application process is performed online

CONS

• Not licensed to operate in all 50 states
• No program to help homebuyers with bad credit

HIGHLIGHTS

J.D. POWER RATING

Not Rated

NMLS REGULATORY ACTIONS

3

MIN. CREDIT SCORE

680 (Conventional), 580 (FHA), 620 (VA), 640 (USDA)

REFI LOAN TYPES

Fixed-rate, ARM, Jumbo, VA, FHA, Conventional, USDA (in select states)

Mortgage Refinance Guide

When you refinance you replace your current loan with a new mortgage. Our mortgage refinance guide can be particularly useful for those refinancing their home loan for the first time and provides information about different types of mortgage products, the benefits of refinancing a mortgage and what documents financial institutions require for a complete application.

Whatever your needs, read on to learn more about the process and make an informed decision.

Types of mortgage refinance

Rate-and-term refinance

Also known as a “no cash-out refinance,” a rate-and-term refinance is the most common type of refi. When you do a rate-and-term refinance you take out a new loan with the same loan balance as your existing mortgage but ideally get a low interest rate or shorter term length (or both). You can also use this type of refi to switch from an adjustable-rate mortgage to a fixed-rate loan.

What to watch out for: You will have to pay closing costs and go through the appraisal process again.

Zero-closing-cost refinance

Some lenders offer “no-closing-cost” or “zero-closing-cost” refinance loans for those who qualify. These let you roll closing costs into your mortgage loan. While you’ll still pay closing costs and interest on those fees, it won’t be upfront.

What to watch out for: Closing costs are folded into the principal loan amount, so your monthly payment is higher than with a rate-and-term refinance.

Cash-out refinancing

A cash-out refinance converts a portion of the home equity you’ve accumulated into cash, similarly to a home equity loan or home equity line of credit (HELOC). A cash-out refi replaces your existing mortgage with a new loan with a higher balance than your current loan. In turn, you get the difference as a tax-free cash advance paid to you at closing. Many borrowers use these loans to fund home improvements.

What to watch out for: The borrower may end up with a higher interest rate and monthly payment. Keep in mind that you should only borrow an amount that’s feasible to pay off.

Cash-in refinance

A cash-in refinance allows borrowers to lower their mortgage principal during a refinance negotiation. With this type of loan, the borrower makes a lump sum payment on their mortgage, lowering the principal balance on their new loan.

Contrary to cash-out refinancing, this option may improve the chances of an underwater mortgage qualifying for a refinance. Generally, most lenders require a loan-to-value ratio (LTV) of at least 80%.

What to watch out for: Your funds will be tied to your home, so you won’t be able to use them to pay off other debt, cover emergency expenses or invest.

Streamline refinance

Streamline refinance allows a borrower to refinance an existing FHA loan or VA loan with limited documentation or underwriting. These loans generally don’t require appraisals and may or may not require employment and income verification. You do need to show a history of on-time mortgage payments.

What to watch out for: The VA and FHA set specific qualification requirements for both loans and homes.

Low-income enterprise-backed mortgage refinance

In summer 2021, Fannie Mae and Freddie Mac implemented new refinance options for low-income borrowers. Eligible borrowers can now refinance their mortgage at a reduced interest rate and lower monthly payments. According to the Federal Housing Finance Agency (FHFA), borrowers may save an estimated $100 to $250 a month.

To qualify, borrowers must:

• Have a mortgage backed by Fannie Mae or Freddie Mac (the Enterprises) for the house they live in
• Have an income at or below 80% of the area’s median income
• Have no missed payments in the past six months and no more than one missed payment in the previous 12 months
• Have a debt-to-income ratio below 65% or a FICO credit score of at least 620
• Have a mortgage loan to value (LTV) ratio lower than 97%

Other federal loan programs that could help consumers who are facing financial hardship include Hope for Homeowners (HFH) and the Home Affordable Refinancing Program (HARP).

How does refinancing work?

Refinancing a mortgage works by replacing your existing home loan with a new one. You will be changing your current interest rate, monthly payments and loan term for new ones (established in the agreement terms of your new loan).

Say you obtained a $300,000 mortgage at 6% interest, with a monthly payment of $1799. After 14 years, you have a remaining balance of $223,000 and decide to refinance into a new 30-year mortgage at 5% interest. Your new monthly payment will be $1,197 and you will have a new payback time of 30 years.

While many homeowners are attracted to refinancing because of the possibility of finding lower rates, there are other reasons for taking out a new home loan, including using home equity to pay off higher interest debt and changing the term of the loan.

Should you refinance your mortgage?

If you’re on the fence about mortgage refinance, we’ve provided information about the pros and cons of refinancing, what can that money be used for, and the documentation financial institutions require for a complete application.

Under the right circumstance, refinancing can help:

• Lower the interest rate on your mortgage
• Lower your monthly payment
• Shorten your loan term
• Pay off higher-interest debt such as credit cards

Should I refinance with my current lender?

Before selecting a refinance mortgage lender:

• Shop around and request loan estimates from multiple lenders
• Look into current mortgage rates and make sure you will end up with a better APR than you have now

You might find different lenders offer better deals in terms of mortgage rates, loan products, or closing costs. Use our mortgage refinance calculator to get an idea of how much you could be saving.

What do you need to refinance your mortgage?

There are three primary factors lenders consider when reviewing mortgage refinance applications: credit score, debt-to-income ratio and loan-to-value ratio (LTV).

• A low debt-to-income (DTI) ratio: You need a DTI of up to 43% for conventional loans or less than 50% for an FHA mortgage refinance, according to the Consumer Financial Protection Bureau (CFPB). Use our DTI ratio calculator to find where you stand.
• A healthy FICO credit score: Most mortgage refinance lenders have a minimum credit score requirement of 620, but you’ll get the best rates for a score upwards of 740.
• A Loan-to-value ratio (LTV) of 20% or more: The LTV is the amount of the loan you want to take out divided by the appraised value of your home.

☑ A copy of your government-issued ID or Social Security card

☑ Proof of income for the last 30 days

☑ W-2s for the past 2 years

☑ Federal tax returns (personal and business) for at least the last 2-3 years

☑ Written explanation if employed less than two years or if there’s a gap or change in employment

☑ Address of property to be refinanced and purchase contract

☑ Homeowners’ insurance information such as the agent’s name and contact information

☑ Bank statements and statements of assets

☑ Bankruptcy/ discharge papers if applicable

When is refinancing your mortgage not the best idea?

Just because you can refinance doesn’t mean you should.

For starters, if your interest rate will not drop at least 0.5 to 0.75 percentage points, most experts will argue that it’s not worth it.

Refinancing also means closing costs and other potential fees. Even if you are paying less each month, it does not make sense to refinance if you will not recoup closing costs before you expect to move.

The following are a handful of reasons to reconsider a mortgage refinance:

• If your refi terms won’t save you much in interest
• Your credit score has taken a dive since your original mortgage
• High closing costs
• Your new minimum monthly payment will be out of your budget
• You have plans to move out in the near future

Latest News on Mortgage Refinance

Determining whether to refinance your mortgage or not means taking a hard look at your finances and running the numbers to see if it makes financial sense. Mortgage rates are on the rise which means that for many homeowners, the opportunity to refinance into a lower rate isn’t there.

However, for some homeowners, a refinance may still make sense. There are about 700,000 owners who could reduce their current interest rate and cut down their monthly payments. Mortgage refinancing can also help reduce the term of your loan, or allow you to tap into equity you’ve built via a home equity loan.

If you’re a homeowner who falls into one of these categories, here are 7 Steps to refinancing that will guide you through the next steps.

1. Define your refinancing goal (e.g. lower your rate, shorten your term, etc.)
2. Check your home equity
3. Check your credit score and credit report
4. Calculate whether refinance costs will be worth it
5. Get your W2, 1099 forms and other documents ready
6. Shop for a lender
7. Lock in your rate

Best Mortgage Refinance FAQ

What is refinancing?

When you refinance a mortgage you replace your current loan with a new one with a different term length, interest rate or amount borrowed. Ideally, refinancing can help you save money on your mortgage by negotiating a lower interest rate or reducing the number of years you need to pay.

How often can you refinance your home?

How much does it cost to refinance a mortgage?

When to refinance a mortgage?

What are today’s mortgage refinance rates?

How soon can you refinance a mortgage?

What is the average closing cost to refinance a mortgage?

How We Chose the Best Mortgage Refinance Companies

Our methodology considered:

• Lenders that provided a quality customer experience with online tools, pre-approvals, discounts, or exclusive refinance programs
• Lender size, reputation, and complaints. We consulted the Mortgage Bankers Association, J.D. Power’s U.S. Primary Mortgage Origination Satisfaction Study and the NMLS (Nationwide Multistate Licensing System or “Nationwide Mortgage Licensing System”)
• Consumer feedback and expert input

Summary of Money’s Best Mortgage Refinance Companies of September 2022

• Rocket Mortgage – Best Refinance Lender Overall
• Zillow – Best Marketplace
• Better – Best for Fast Closing Time
• loanDepot – Best for Online Mortgage Refinancing
• Navy Federal Credit Union – Best Credit Union
• Ally Financial – Best for Jumbo Loans
• Nationwide – Best for Borrowers with Poor Credit
• Bank of America – Best for Member Discounts