BEST OF

12 Best Mortgage Refinance Lenders of December 2020

If you're interested in refinancing to a lower rate or lower monthly payment, check out our list of some of the best mortgage refinance lenders.

NerdWalletSeptember 3, 2020
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Historically low interest rates have compelled many homeowners to refinance their mortgage in 2020. The millions of people who could still save by refinancing now face a new fee imposed by Fannie Mae and Freddie Mac. The government-sponsored companies will begin implementing a surcharge on conventional loan refinances on December 1, potentially cutting into some borrowers’ refinancing savings.

If you want to take advantage of low rates before the impending fee deadline, NerdWallet has picked some of the best refinance lenders in a variety of categories so you can determine which one is right for you.

Summary of Best Mortgage Refinance Lenders of December 2020

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at Better.com

Better.com: NMLS#330511

Great for digital convenience

5.0

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%

at Better.com


Why we like it

Good for: tech-savvy borrowers who prefer an online experience.

Pros

  • An online process with human help as needed.

  • Makes it easy to see customized mortgage rates.

  • Offers an "underwriter-reviewed" preapproval letter in as little as 24 hours.

Cons

  • Doesn't offer home equity loans or HELOCs.

  • Doesn't do FHA, VA or USDA loans.

Read Full Review
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at Guaranteed Rate

Guaranteed Rate: NMLS#2611

5.0

NerdWallet rating 
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Min. Credit Score

620

National / Regional

National

at Guaranteed Rate


Why we like it

Good for: homeowners who are looking to refinance conventional, FHA or VA mortgages.

Pros

  • Offers the ability to securely upload and digitally sign loan documents.

  • Displays detailed sample rates for many of its refinance loan products.

Cons

  • Charges some fees, such as a lender fee which includes an application fee.

Read Full Review
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at Rocket Mortgage

Rocket Mortgage by Quicken Loans: NMLS#3030

4.5

NerdWallet rating 
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Min. Credit Score

620

National / Regional

National

at Rocket Mortgage


Why we like it

Good for: refinance borrowers who want a fully digital home loan experience powered by Quicken Loans.

Pros

  • Offers conventional and government-backed refinance mortgages.

  • Customized loan recommendations based on refinance goals.

  • Offers document and asset retrieval capabilities.

Cons

  • If you’re a “look me in the eye” type of customer, you’re out of luck.

  • Getting a customized interest rate requires a credit check, which can lower your credit score by a few points.

Read Full Review
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at LoanDepot

loanDepot: NMLS#174457

3.5

NerdWallet rating 
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Min. Credit Score

620

National / Regional

National

at LoanDepot


Why we like it

Good for: borrowers looking to refinance or who want to start the application process online.

Pros

  • Offers digital income, asset and employment verification.

  • Offers multiple renovation loan options.

  • Has over 200 affiliated loan stores nationwide for customers who prefer face-to-face service.

Cons

  • Mortgage rates aren't available online; you'll need to contact a loan officer.

  • Does not offer home equity loans or lines of credit.

Read Full Review
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at Veterans United

Veterans United: NMLS#1907

4.5

NerdWallet rating 
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Min. Credit Score

660

National / Regional

National

at Veterans United


Why we like it

Good for: veterans, active-duty service members and eligible Reservists looking to refinance VA or non-VA loans.

Pros

  • Offers VA IRRRL, or “Streamline,” and cash-out refinance loans.

  • Access to 24/7 customer service over the phone.

  • Has online application and pre-qualification.

  • Offers a free credit counseling service.

Cons

  • Veterans United has physical branch offices in only 18 states.

  • Information on refinances for FHA, USDA and conventional loans is harder to find on their website.

  • Charges higher rates and fees than some other lenders.

Read Full Review
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at Reali Loans

Reali Loans: NMLS#991397

3.5

NerdWallet rating 
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Min. Credit Score

620

National / Regional

Regional

at Reali Loans


Why we like it

Good for: borrowers looking for an online mortgage application experience.

Pros

  • Offers a completely online application process.

  • Provides customized rate quotes online.

Cons

  • No FHA, VA or USDA refinance products.

  • Available only in a dozen states.

Read Full Review
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at Chase

Chase: NMLS#399798

4.5

NerdWallet rating 
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Min. Credit Score

620

National / Regional

National

at Chase


Why we like it

Good for: refinancers who want a name-brand bank, with offices in more than half the states, that charges lower rates and fees than many other lenders.

Pros

  • Fixed- and adjustable-rate refinance options.

  • Customized refinance rate quotes available online without providing personal info.

Cons

  • You have to speak with a home loan advisor to complete the application.

Read Full Review

LenderFi: NMLS#133056

5.0

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Good for: borrowers who want a completely online experience when buying or refinancing.

Pros

  • Has a full suite of online capabilities, including application, document uploading and process updates.

  • Site displays many combinations of loans and interest rates.

  • Rates and fees are lower than many lenders.

Cons

  • Home equity loans and lines of credit, and purchase-renovation loans, aren't available.

  • Jumbo and VA loans may be temporarily unavailable.

Read Full Review

Navy Federal: NMLS#399807

4.5

NerdWallet rating 
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National / Regional

National

Min. Down Payment

0%


Why we like it

Good for: Military members and their families looking for low-down-payment mortgages.

Pros

  • Offers a wide range of affordable mortgage products designed for military members.

  • Has an online application for preapproval.

  • Offers low rates compared with most lenders.

Cons

  • Website does not provide customized mortgage rates based on credit score or other factors before you apply.

  • Credit union membership is limited to veterans and current military members, their families, and certain federal employees, retirees and contractors.

Read Full Review

SunTrust: NMLS#2915

5.0

NerdWallet rating 
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Min. Credit Score

620

National / Regional

National


Why we like it

Good for: borrowers seeking rate-and-term, cash-out or VA IRRRL refinancing.

Pros

  • Offers a complete suite of online mortgage application tools and loan tracking.

  • Sample rates and fees are easy to find on the website.

Cons

  • Customized rates aren't available online without starting an application.

  • Branches are limited mostly to the Southeast.

Read Full Review

Bank of America: NMLS#399802

5.0

NerdWallet rating 
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Min. Credit Score

620

National / Regional

National


Why we like it

Good for: borrowers who like options. Bank of America offers multiple refinance loans, including FHA, VA and cash-out.

Pros

  • Offers refinance mortgages with fixed and adjustable rates.

  • Allows borrowers to apply entirely online.

  • May give existing customers a discount on mortgage lender origination fees.

Cons

  • Does not offer renovation loans.

Read Full Review

Alliant: NMLS#197185

4.5

NerdWallet rating 
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Min. Credit Score

NA

National / Regional

National


Why we like it

Good for: refinancers who prefer a digital application process.

Pros

  • Offers fixed-rate and adjustable-rate mortgage refinancing with multiple term options.

  • Refinancing available with as little as 5% equity.

Cons

  • Does not offer FHA, VA or USDA mortgage refinancing.

Read Full Review

Mortgage Refinance FAQs

NOTE: Due to the coronavirus outbreak, refinancing may be a bit of a challenge. Lenders are dealing with high loan demand and staffing issues. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this emergency, see NerdWallet’s financial guide to COVID-19.

What is a mortgage refinance?

When you refinance, you get a new mortgage to replace your current home loan. Just as when you bought the home, you will most likely undergo a credit check and pay closing costs. Some lenders offer a "no closing cost" refinance, in which you pay a higher interest rate in exchange for paying little or nothing at closing.

Why refinance your mortgage?

There are multiple reasons to refinance your mortgage. People usually refinance to save money, either in the short run or the long run, and sometimes to borrow against their equity. Here are some of the main reasons to refinance:

To get a lower mortgage rate. If mortgage interest rates fall after you get the loan, you may be able to refinance to a lower rate. This can result in smaller monthly payments.

To shorten the term. Refinancing from a 30-year mortgage to a shorter-term loan (15 or 20 years, most commonly) might increase your monthly payment (even with a lower interest rate), but it decreases the overall interest you pay over the life of the loan.

To get rid of mortgage insurance. When you buy a home with a down payment of less than 20%, you have to pay for mortgage insurance. Refinancing is one way to stop paying private mortgage insurance, and it's the only way to get rid of FHA mortgage insurance.

To replace an adjustable-rate mortgage, or ARM, with a fixed-rate loan. Rather than enduring the uncertainty of annual interest-rate adjustments with an ARM, you might refinance to a fixed-rate loan so you don't have to worry that the rate will rise.

To get your hands on equity. With a cash-out refinance, you borrow more than your current loan balance and take out the difference in cash. A cash-out refinance is a popular way to pay for home improvements.

WHAT ARE COMMON REFINANCE REQUIREMENTS?

In order to qualify for a mortgage refinance, you will need to meet the criteria set by your lender and loan program:

Credit score: A higher credit score can help you secure the lowest refinance interest rate. Government-backed refinance loans typically have lower credit score requirements than conventional loans. With an FHA cash-out refinance, the minimum score requirement is 500, for example. With a conventional refinance, it’s at least 620. But lenders are permitted to set higher minimums if they choose.

Debt-to-income ratio: Your debt-to-income ratio is the portion of your gross income that goes to paying your debt. Many lenders require a DTI below 36%. You can refinance a mortgage with a higher DTI, but you may pay a higher interest rate.

Home equity: Your home equity is the value of your home minus what is owed on the mortgage. The amount of equity you need to refinance varies by lender and type of mortgage, but 20% equity is a common requirement.

Refinance wait period: While you can refinance as often as you want, some lenders require a “seasoning” period between loans. With a conventional cash-out refinance, for instance, you will have to wait six months. If you are refinancing an FHA, VA, or USDA mortgage, the waiting time varies between six and 12 months.

HOW DO I DECIDE WHO TO REFINANCE WITH?

Whether you’re looking for the reach of a traditional bank or the personalized service of a credit union, always shop multiple lenders and compare the interest rate and terms each lender offers. Even though it might be easy to refinance with your current mortgage lender, they may not offer the best deal.

Everything can be negotiated. Your lender is required to provide you with a Loan Estimate after you apply. Compare fees listed under the ‘origination charges’ on the document. If you are not comfortable with a fee, negotiate for it to be removed or reduced.

What is the real cost of your mortgage? Look at the annual percentage rate or APR. This number covers all the costs of the mortgage including the interest rate and fees.

WHAT TYPES OF MORTGAGE REFINANCES ARE AVAILABLE?

Whether you’re looking to refinance into a conventional or government-backed mortgage, there are generally three types of refinances:

Rate and term refinance: A rate and term refinance is exactly what it sounds like: you refinance your mortgage to reduce the interest rate, shorten the term of the loan, or both.

Cash-out refinance: A cash-out refinance is when you replace your mortgage with a new one for more than your home is worth. The difference goes to the homeowner as cash that can be used for home improvements or other financial responsibilities. There are conventional, as well as FHA and VA cash-out refinancing options.

Streamlined refinance: The FHA, VA and USDA offer streamlined refinancing options that may allow you to skip the usual appraisal and credit check, saving you time and money. The FHA streamline and VA IRRRL both require that the refinancing result in a financial benefit: either a reduction in your monthly payment or interest rate.

When can you refinance a mortgage?

You can generally refinance as often as it makes financial sense to do so. There is an exception: Some lenders require "seasoning" between refinances — in other words, they require you to have the loan for a specified number of months before refinancing again.

How do you refinance your mortgage?

The first step in refinancing is determining your goal. Do you want to reduce your monthly payment? Shorten the term? Get rid of FHA mortgage insurance? Move from an ARM to a fixed rate? Borrow from equity?

After you have identified your goal, you’ll shop for a refinance lender, apply and close on your new mortgage, the same way you did when you bought the home.

More from NerdWallet

Last updated on September 3, 2020

Methodology

NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.

To recap our selections...

NerdWallet's Best Mortgage Refinance Lenders of December 2020