Every borrower knows that refinancing a mortgage will help lower the loan cost, and helps save him or her thousands of dollars. However, it is important to consider dealing only with the best refinance mortgage companies to ensure you get the best rates possible.
In a recent report published by Forbes online, it says that low mortgage interest rates continue to rise in refinance activity regardless of the crisis people are going through right now because of the coronavirus pandemic.
In fact, according to Forbes, the surge resulted in a record-breaking loan volume for lenders between March to May.
In the same report, it says that “the refinance share of mortgage activity continued to rise, accounting for 65% of closed loans in April, up from 55% in March and 51% in February.”
Refinancing a mortgage is one of the best decisions any borrower can make especially when stuck in a crisis. By refinancing the loan, the borrower gets to save a few bucks, which can be used for other essential things.
But just like when you are just starting to find a lender when you were eyeing that house you’re in now, it is also important that you look around, shop around for the best refinance mortgage companies. That way, you get to find the best deals possible (rates and terms in particular) – the one that’ll fit your personal preference and of course, your budget.
So, having said that, we are going to share with you some of the best refinance mortgage companies in the country today.
But first, here are some important information we thought a borrower must know first before you even seal a deal with a refinance mortgage company:
- What is a mortgage refinance?
- Why refinance your mortgage?
- When to refinance a mortgage?
- How to find the best refinance mortgage company?
WHAT IS A MORTGAGE REFINANCE?
Before we even talk about the different outstanding refinance mortgage companies out there, we thought it’s important that as a borrower, you fully understand first what your getting yourself into.
So, first and foremost let’s define what a mortgage refinance actually means.
Similar to any type of loan refinancing, when we say mortgage refinance, it basically refers to getting into a new mortgage to replace your current home loan.
By refinancing a mortgage, a borrower gets to first, lower the cost he or she pays on a monthly-to-month basis, and that he or she gets to save thousands of dollars on his or her pocket.
When getting into a mortgage refinance, it is important to only deal with banks or any financial institutions or lending companies that offer a lower cost to what you are currently paying. Otherwise, refinancing will be useless.
Yes, the very reason why you refinance a loan is to be able to first, save money, and then, second, to shorten the term length.
WHY REFINANCE YOUR MORTGAGE?
Now, why do you need to refinance your mortgage? Why not stick to the original loan?
Well, there is totally nothing wrong if you’d rather choose to just stick with the original mortgage. Refinancing is just an option for those who want to lessen the cost they are paying, at the same time, enjoy flexible term length.
To give you a more thorough explanation on why borrowers consider refinancing their mortgage, here are some of the common benefits that refinancing mortgage provides:
- Lower Mortage Rate – We kept saying this already. But realistically speaking, it is the primary reason why people get into refinancing loans whether it be for a home loan, personal loan, etc. Getting a lower mortgage rate results in smaller monthly payments, which is really beneficial as you get to save a few bucks, right?
- Shortened Loan Term – By refinancing, you can shorten a loan term from a 30-year term to 15 or 20 years. While there is a chance that shortening the term might increase your monthly payment, it can definitely help decrease the overall interest you pay over the lifespan of your loan.
- Getting Rid of Mortgage Insurance – Generally, when buying a home with a 20% down payment or less, you will be required to pay for mortgage insurance. However, by refinancing the mortgage, you get to stop paying private mortgage insurance. Needless to say, it is the only way to get rid of FHA mortgage insurance.
- Get into Equity – Through a cash-out refinance, you get to borrow more than what your current loan balance is, and then, you can take out the cash difference, which is usually used to pay for home improvements.
- Replace Adjustable-Rate Mortgage (ARM) with Fixed-Rate Loan – Instead of enduring the uncertainty of annual interest-rate adjustments with an ARM, you may instead consider refinancing with a fixed-rate loan. That way you free yourself from worries of the rate rising to a certain extent.
WHEN TO REFINANCE YOUR MORTGAGE?
Generally speaking, a borrower may refinance a mortgage as often as he or she can — as long as it makes financial sense, of course.
However, there are refinance mortgage companies or lenders that require “seasoning” between refinances, which means the lender requires the borrower to have the loan for a particular number of months before refinancing again. So, to be sure, ask your preferred lender.
If you want to learn more about when to refinance your mortgage, check out the very informative video below by The Dave Ramsey Show:
HOW TO FIND THE BEST REFINANCE MORTGAGE COMPANY?
There are certain things that borrowers need to work on in order to find the best refinance mortgage company. Don’t worry, these are basic things. In fact, you probably have gone through the same when you were looking for a lending company to help finance your dream home.
Anyway, here are some of the things that you need to take into consideration when finding the best refinance mortgage companies (which is tantamount to finding the best refinance rates ever):
- Build an impressive credit score. This one’s pretty obvious — needless to say, very generic. If you want to get good interest rates, you better have an outstanding credit score.
- Shop and compare mortgage refinance rates. As much as possible, shop around. Do not just settle for one lending company. Remember, there are so many options out there. You’ll never know which one offers the best rates and terms if you will not shop and compare.
- Buy points. Some homeowners may not be aware that they can actually buy points to help lower their interest rates. This basically means you pay the lender upfront for a lower rate over the course of the mortgage. Please note that one point is equivalent to 1 percent of the loan amount.
- Choose the best loan term. Generally speaking, the shorter the loan term is, the higher the monthly payment will be. But that means a lower interest rate. Meanwhile, the longer the term is, the lesser you pay monthly, but the total amount may just be the same, if not even higher than what you are actually paying now. So, choose wisely.
- Go for a fixed interest rate. To be honest, the value for borrowers slash homeowners is at a fixed rate as with variable or adjustable-rate mortgage (ARM), the interest rate changes.
BEST REFINANCE MORTGAGE COMPANIES
Now that you already know what refinancing a mortgage is all about, the reasons why you should consider refinancing a mortgage, when you should consider refinancing, and the factors that affect in finding the best refinance mortgage companies in town, it’s time to share with you our list of some of the industry’s best refinance mortgage companies.
These are —
- American Federal Mortgage
- Bank of America
- Raymond James Bank
- Rocket Mortgage
- Santander Bank
- Third Federal Savings and Loan
|Bank||Annual Percentage Rate (APR)||Loan Terms||Minimum Credit Score|
|American Federal Mortgage||varies||Not stated but offers various flexible loan terms||580|
|Bank of America||3.75%||Up to 30 years||600|
|Chase||varies||Up to 30 years||620|
|Raymond James Bank||4.303%||Up to 30 years||580|
|Rocket Mortgage||Varies||Up to 30 years||580|
|Santander Bank||4.303%||Up to 30 years||580|
|Third Federal Savings and Loan||3.02%||Up to 30 years||varies|
AMERICAN FEDERAL MORTGAGE
There are a couple of noticeable things about the American Federal Mortgage.
First, unlike other mortgage companies, the American Federal Mortgage application process is quick and easy. Borrowers may submit a mortgage refinance application online, and receive feedback within 24 hours.
Pretty quick? Well, that is made possible by the use of computerized underwriting. This step helps streamline the loan approval process.
In addition, another unique feature of American Federal Mortgage has something to do with its corporate incentive program. If the company you work for is a member of this program, you may take advantage of a mortgage discount. On top of that, you won’t be charged for application or origination fees, plus the appraisal fee is refundable.
So, better check now if your company is a member so you get to enjoy these perks.
By the way, American Federal Mortgage is one of the largest privately-held mortgage bankers in the country and is headquartered in Chester, New Jersey.
BANK OF AMERICA
Bank of America is one of the largest banks in the country. Needless to say, it’s been around for years. It’s a trusted and reputable financial institution — you can never go wrong of.
The bank offers various products and services, which include mortgage refinance.
Bank of America provides three mortgages refinance options for approved loans. The options include 15-year fixed, 30-year fixed, and 5/1 adjustable-rate mortgages. All these come with some of the most competitive rates in the industry.
Of all the options available, Bank of America’s 15-year fixed-rate mortgage is the most competitive.
In addition to the options available for mortgage refinancing, the bank also offers a cash-out refinance option to borrowers who have sufficient equity. All qualified homeowners with equity may get the chance to refinance as well as borrow more to pay off other existing debts. Keep in mind, though, that it may also mean a larger loan.
While the cash-out refinance is a good option for those who are trying to get rid of high interest, it may be a little risky for the others.
By the way, Bank of America lends money of up to $5,000,000. Thus, making it ideal for borrowers or homeowners who need to loan a big amount of money.
As stated on its website, Chase is the country’s “consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading global financial services firm with $2.6 trillion in assets and operations worldwide.”
When it comes to reputation and credibility, Chase definitely has it.
Generally, Chase offers a wide variety of outstanding products and services. So, it’s not surprising that their mortgage refinance option is included in this list.
Chase Bank does offer several mortgage options, which include adjustable-rate mortgages. Borrowers may choose from 5/1, 7/1 and 10/1 ARMs.
Unfortunately, Chase is not all-digital based, which means borrowers may need to visit the nearest branch to be able to apply for a mortgage refinancing.
It is important to note though that while home-lending advisors are not available in every state, the bank originates home loans across all 50 states.
RAYMOND JAMES BANK
Although headquartered in St. Petersburg, Florida, Raymond James Bank serves the whole country when it comes to their mortgage and mortgage refinancing products and services.
Raymond James Bank has a reputation for taking an all-inclusive, client-focused approach to finance. Furthermore, the bank also takes pride in its dedication to providing customers with personalized solutions to their financial needs.
When it comes to the lending process, Raymond James Bank provides borrowers with a great deal of variety in terms of mortgage types. The bank offers government-backed fixed mortgages with 30-year terms, 15-year fixed-rate and 30-year fixed-rate mortgages, as well as a great selection of ARM mortgages with terms ranging from 5/1 to 15/1.
Rocket Mortgage is a product of Quicken Loans, the country’s largest mortgage lender. Rocket Mortgage was designed to streamline the mortgage, or mortgage refinances, as well as process and shorten the time from initial application to closing of the loan.
According to Realtor Magazine and the National Association of Realtors, closing on a refinance usually runs for about 48 days. However, Rocket Mortgage is usually able to push closing through more quickly than its competitors because of its association with Quicken Loans.
Unlike other refinance mortgage companies, Rocket Mortgage offers a fast and easy pre-qualification process. In fact, so quick that it could only last for up to 10 minutes.
Meanwhile, verification of income, employment, as well as other important personal information is done over the phone. A loan specialist will be the one to conduct it. The process is usually completed within the same day of application.
Once approved, loaned funds are disbursed in about 10 to 35 days. The length of time depends on the timeline for the appraisal process as well as the completion of other requirements.
Santander Bank is the best choice when it comes to low 30-year fixed APR.
Santander Bank, one of the largest retail and commercial banks in the country today, offers a variety of mortgages for homeowners who wish to refinance. The bank’s mortgage refinances products include fixed-rate, adjustable-rate, and special mortgages.
For fixed-rate mortgages, they come in 15- or 30-year terms. Its 30-year term comes with one of the lowest in this category — which is precisely why we said it’s one of the best options for 30-year fixed APR.
Meanwhile, ARM mortgages are available on 5/1, 7/1, or 10/1 terms. Similar to its fixed-rate option, ARM mortgages do have lower initial rates that stay as it is for the first 5, 7, or 10 years of the mortgage. Then, the rates adjust annually.
Apart from the above-mentioned, Santander also offers special mortgages like government-backed FHA and VA mortgages.
Unlike other lenders, Santander Bank does not charge any origination fees. However, it does offer a point’s buy-down system, which allows borrowers or homeowners to buy one point for 1% of their loans. Each point-bought can help reduce the interest rate by 0.08% to 0.25%.
THIRD FEDERAL SAVINGS AND LOAN
If you are looking at getting a 10-year fixed-rate loan, then Third Federal Savings and Loan may just be the right choice for you.
Third Federal Savings and Loan has become a top pick among borrowers because it offers one of the lowest 10-year fixed-rate refinance rates in the country. At the moment, it starts at 3.02% APR.
When it comes to requirements, Third Federal Savings and Loan is known to be less strict particularly for private mortgage insurance, which is usually required unless the buyer can put down a 20% down payment.
With Third Federal Savings and Loan, the company only requires PMI if you have a down payment of 15% or less.
Similar to other lenders out there, borrowers need to keep in mind that there are closing costs to consider. However, the cost can be as little as $295 only for all smart ARM as well as 10-year fixed-rate loans. Also, all of the loan costs bundled into one convenient feed.
In addition, while most lenders offer a 30-day rate lock, Third Federal offers a 60-day rate lock.
When it comes to reputation and credibility, Third Federal Savings and Loan has maintained a 5-star Bauer rating for 25 years.
Unfortunately, though, Third Federal Savings and Loan is only available across 25 states and the District of Columbia.
FINAL THOUGHTS ON BEST REFINANCE MORTGAGE COMPANIES
Refinancing a mortgage is definitely a must-do if you want to either lessen the cost you pay on a month-to-month basis, or you want to speed up the loan terms.
Good thing is, there are a lot of financial institutions out there that offer refinancing for home loans, which means, borrowers, do have a lot of options to choose from.
However, as we have said, if you are looking at refinancing a home loan or any loans for that matter, make sure to shop around first before settling for one. By doing so, you get to choose the best deals possible.
Are considering refinancing anytime soon?