Compare Mortgage Refinance

From refinance rates and mortgage types to mortgage related fees and reviews, we research everything you need to compare mortgage refinance and make a decision. Learn how our editors compare the different factors of mortgage refinance below.
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Before considering a big step like a new mortgage, take a minute and ask yourself why you want to refinance and what you hope to gain. Though refinancing can be an excellent option for many people, helping them to obtain a lower rate and gain equity quicker; for somebody in financial straits, it may eventually put your house at risk. Some things to consider is whether your loan has a prepayment penalty, if the closing costs and fees would make refinance unviable, how long you're planning on staying in your home, or if you're already close to paying off your mortgage. 

How we Compare Mortgage Refinance

Refinance Rates - 20%
Mortgage Types - 15%
Home Related Loans - 10%
Qualifying - 20%
Mortgage Related Fees - 20%
Reviews - 15%

Refinance Rates

Whether you're purchasing a new home or refinancing where you live now, mortgage rates will always be a huge factor in deciding which lender to work with. Since the market plays such a big role in determining those rates, they can change daily and even hourly. This may have put you in the unfortunate situation of paying off a loan with higher mortgage rates than the current ones, and make refinance an attractive idea. Other factors can also weigh in on this decision. Maybe your credit situation or savings have improved and you hope that can translate into a rate reduction. To determine your potential savings, the search for a low rate should always be considered in conjunction with closing costs. In any case, when shopping for low refinance rates, it's always important to remember to ask questions, and to compare, compare, compare! 

 

Mortgage Refinance with the Best Refinance Rates:

LendingTreeLoan DepotSoFiQuicken LoansRefinanceCalculatorLendingTree VARate Marketplace
Fixed Rate Mortgages
Adjustable Rate Mortgages

Mortgage Types

There are four major ways with which you can choose to refinance your home. The first is a rate and term refinance, where you renegotiate either the rate and the term of your mortgage, or both. For instance, you may refinance your 5/1 ARM after five years, because the current low mortgage rates might keep your monthly payment the same, without the risks inherent in an ARMs' ever-changing rates. Another option is the cash-out refinance, in which you pull equity from your home. This raises the overall loan balance, but offers the benefit of immediate cash on hand, which you can use for home repair, college, debt repayment, or unforeseen expenses. The opposite of that is the cash-in refinance, in which you bring cash into the process, perhaps because you had a windfall, or simply to keep the loan-to-value ratio low. A fourth option comes from the government. In response to the ongoing mortgage crisis, the federal government developed the Home Affordable Refinance Program (HARP). This initiative refinances homes for 125% of their value, as a tool to help "underwater" homeowners whose loan amounts are higher than the current market value of the property, which must be insured by either Fannie Mae or Freddie Mac. If you think you qualify, be advised that the program ends in December 2017.

As regards rates and specific loan types, here's a quick outline: 

Conventional Loans - these are not insured by a federal agency. They can come in many different forms, including fixed-rate, ARMs, conforming, non-conforming, jumbo, etc.

Adjustable Rate Mortgage - With this type of mortgage, you pay a fixed, low introductory rate for a period of time, and then each following year, your rate changes according to the market. For instance, a 7/1 ARM means you pay a low fee for seven years, and from the eighth year onwards, your rate changes annually. This type of mortgage can be ideal if you have a reasonable expectation of increased future earnings, or if you don't plan on living on the property once the fixed rate period is up.

30-year Fixed Rate Mortgage - This is the most commonly used mortgage, especially for first-time buyers. Interest rates remain fixed for the thirty years it takes you to pay off the loan. This gives homeowners long-term stability and helps with budgetary planning, as each monthly payment never changes. These mortgages work best for homeowners who expect to remain in one house for a long period of time, and don't wish to have a high monthly fee.

15-year Fixed Rate Mortgage - This builds the same stability as the 30-year FRM, but with higher monthly payments. Equity builds faster, and you end up paying less interest overall.

 

The following are government-insured mortgage refinance options:

HARP - If the loan for your primary residence in held by either Fannie Mae or Freddie Mac, was originated on or before May 31, 2009, you're current on your mortgage, and the total amount of your loan is larger than your home's current valuation, this type of refinance can be a great option for you. 

FHA Cash-out - This type of refinance, offered by the Federal Housing Administration, is convenient for those whose property has increased in market value since it was purchased. It allows homeowners to take out another mortgage for more than they currently owe, and therefore take cash out of their home equity.

FHA Streamline - This option is available for existing owners of an FHA mortgage. It allows them to refinance quickly, often without an appraisal, and features the added benefit of cutting down on paperwork and additional costs.

VA Interest Rate Reduction Refinance - This can only be used by homeowners already in posession of a VA mortgage loan. It streamlines the process, and can significantly reduce monthly payments by taking advantage of lower interest rates. Closing costs can even be rolled over into their overall loan amount, requiring no out-of-pocket expenses.

VA Cash-Out Refinance - Both holders of VA and conventional mortgages can qualify for this option. It replaces your existing mortgage, and gives you the opportunity to turn your home equity into cash, (for up to 100% of its value). 

USDA Streamline Refinance - This is only available for current holders of non-delinquent 502 USDA loans (either Direct or Guaranteed), and should be used to lower the monthly interest and premium payments, not to take cash out of the home equity.  However, the program does allow for up to 102% refinancing, with the money to be used for home improvement. As with any streamlined option, it requires less paperwork, closing costs and no property inspection.

Mortgage Refinance with the Best Mortgage Types:

LendingTreeLoan DepotSoFiQuicken LoansRefinanceCalculatorLendingTree VARate Marketplace
HARP
VA
USDA
FHA

Home Related Loans

If it turns out refinancing completely isn't the right choice for you, there are several other alternatives you can rely on for taking cash out of your home's equity (the dollar value difference between the outstanding balance in your mortgage and your home's market value). We discuss these in more depth in other sections, but here's a brief description.

  • Reverse Mortgage - If you're 62 or older, and are house-rich but cash-poor, a reverse mortgage can help you obtain the liquidity you need by allowing you to convert part of your home equity into cash. As a direct opposite to a traditional mortgage, in which you pay the lender and buy your home over a period of time, in a reverse mortgage the lender pays you as a kind of advance payment on your equity. The money is generally tax-free, and doesn't have to be repaid as long as you live in your home. When you die, sell, or move, your estate must repay the loan. Ideally, this would be covered through the sale of the property, and not by saddling your estate with debt. 
  • Home Equity Loans - If you have built up enough equity on your house, you can consider the possibility of taking out a home equity loan. This uses your house as collateral, and generally feature lower APR's, tax-deductible interest costs, and can be easier to qualify for even if you have bad credit. 
  • Home Equity Line of Credit (HELOC) - This operates on the same basic principle as a Home Equity Loan, only instead of giving you a lump sum, it establishes a line of credit for you, with your house as collateral. You withdraw money as you need it, pay it off, and then use it again. Though the interest is typically much lower than a credit card, for instance, you still have to be careful if you're constantly borrowing and repaying.
  • Bridging Loan - Also known as a bridge, caveat or swing loan, this is designed to help you complete the purchase of a property before selling their current home, by offering you short-term access to money at a generally high interest rate, to compensate for the risk involved.

Mortgage Refinance with the Best Home Related Loans:

LendingTreeLoan DepotSoFiQuicken LoansRefinanceCalculatorLendingTree VARate Marketplace
Cash Out Refinancing
Reverse Mortgage
Home Equity Loans

Qualifying

As with any type of mortgage, lenders specializing in home refinance are going to look at a number of factors in order to determine your suitability. Knowing the requirements beforehand makes the application and approval process much easier and efficient. Companies are going to be looking at:

  • Employment and Income - Lenders will want to look at pay stubs, (generally for the past three months).
  • Tax returns - Usually, your W2 and/or 1099's for the last two years.
  • Debt-to-Income Ratio - This includes both housing-related debt and all additional recurring monthly debt
  • Credit Score - Lenders don't just look at the credit reports from all three bureaus, but also take into account if there is any derogatory credit such as bankruptcy or foreclosure (this can make you ineligible).
  • Statement of Assets - Lenders like to see between 3-6 months of mortgage payments in reserve.
  • Homeowner's Insurance and Title Insurance
  • Collateral - This is generally in the form of home equity. To that end, most companies require an inspection and appraisal of the property.

 

 

Mortgage Refinance with the Best Qualifying:

LendingTreeLoan DepotSoFiQuicken LoansRefinanceCalculatorLendingTree VARate Marketplace
Income to Debt Ratio35% or more35% or lower50% or more50% or more40% or more35% or more50% or more
Credit Score580 or better580 or better620 or better620Fair580 or better620 or better
EmploymentAt least 2 yearsAt least 2 yearsAt least 2 yearsAt least 2 yearsDepends on the lenderAt least 2 yearsAt least 2 years

Mortgage Related Fees

There are several fees included in the costs of refinancing your home. Choosing one of the streamlined refinance options we mentioned above may eliminate the need for some of them.

  • Application Fee
  • Loan origination fee
  • Appraisal fee
  • Inspection fee
  • Title Search
  • Escrow
  • Closing fee
  • Legal fees
  • Homeowners insurance
  • Private mortgage insurance (PMI)
  • Points (these are usually negotiable)

Some lenders can provide no-cost refinancing – an arrangement in which the lender agrees to pay the closing costs but charges you with higher interest rates. This can also be achieved by folding closing costs into your loan.

Mortgage Refinance with the Best Mortgage Related Fees:

LendingTreeLoan DepotSoFiQuicken LoansLendingTree VARate Marketplace
Application Fee
Loan Origination Fee
Appraisal Fee
Inspection Fee

Reviews

Mortgage refinance can be even more daunting than a first mortgage, with so many options to choose from. More than ever, we wanted to make sure that the companies we reviewed had high levels of customer satisfaction, so we took into account not only their scores in customer review sites, but also their legitimacy and proven track record.

 

 

Mortgage Refinance with the Best Reviews:

Full Mortgage Refinance Comparison

Refinance RatesMortgage TypesHome Related LoansQualifyingMortgage Related FeesReviews
LendingTree Mortgage Refinance9.79.79.89.79.99.9
Loan Depot Mortgage Refinance9.59.09.08.09.09.5
Rocket Mortgage Refinance9.08.09.09.09.38.0
SoFi Mortgage Refinance9.08.58.759.09.08.0
Quicken Loans Mortgage Refinance9.08.09.09.08.59.0
RefinanceCalculator Mortgage Refinance9.08.08.59.09.58.0
LendingTree VA Mortgage Refinance9.95.09.55.09.99.9
Rate Marketplace Mortgage Refinance8.18.08.08.08.08.0
AmeriValue Mortgage Refinance8.57.07.57.57.17.0
Military Mortgage VA Loan Mortgage Refinance4.07.07.47.18.06.0
Chase Mortgage Refinance6.03.05.06.03.04.0
Wells Fargo Mortgage Refinance3.03.04.05.05.05.0
Bank of America Mortgage Refinance5.05.02.06.03.02.0
PenFed Mortgage Refinance5.04.05.03.02.06.0
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Latest Reviews

Reviews help other customers make decisions. Share your experience with Mortgage Refinance
Layo Ven
2/2/2017
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1/15/2017
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Trent H
8/6/2016
Lending tree does a great job of giving you many options. I do not like the fact that a phone number must be entered immediately. Get ready to have your phone blow up with offers.

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