Best mortgage refinance lenders of October 2024 #CashNews.co

The best mortgage refinance companies offer a combination of low fees and competitive interest rates. These lenders also provide a full range of refinancing loan options.

At Yahoo Finance, we use stringent criteria to narrow a large field of mortgage contenders down to the very best. Whether you’re looking to fund home improvements, pay off high-interest credit card debt, or trade in your current higher-interest-rate mortgage for a new lower-rate loan, these lenders are among the best home loan refinance providers in the country.

In this article:

Best refinance mortgage lender overall

Truist

The Yahoo view: Truist earns top honors for refinancing because of its broad selection of loans, no doubt contributing to its standing as a top 10 refinance lender by volume.

Stars: 4.00

Read our full Truist mortgage review

Key benefits

• In a Yahoo Finance analysis, Truist had the lowest median debt-to-income ratio requirement of our Best Refinancing Lender finalists. The Truist median DTI was 30. The other finalists’ DTI ratios ranged from 36 to 45. DTI flexibility can be a difference-maker in getting approved.

• Truist offers sample mortgage refinance rates with one or zero discount points. That helps you make a decision on whether buying points makes sense for you.

• Offers refinancing for conventional, VA, and FHA loans.

Need to know

• Unfortunately, as much as we like Truist’s sample mortgage rates shown with or without discount points, rate assumptions such as credit score and down payment aren’t readily available. That makes the advertised rates less useful.

• Has only an average score for customer satisfaction, according to the latest J.D. Power Mortgage Origination Satisfaction Study.

Learn more: 5 strategies to get the lowest mortgage rates

Best overall (runner-up)

TD Bank mortgage

The Yahoo view: TD Bank is another excellent mortgage refinancing lender but earns runner-up status due to its regional service area.

Stars: 4.00

Read our full TD Bank mortgage review

Key benefits

• The TD Home Loan Match tool helps you determine the best refinance loan for your situation and estimates your mortgage rate.

• Fee discounts are available to TD Bank customers or people who make loan payments with autopay.

Need to know

• TD Bank operates in just 15 states (Connecticut, Delaware, Florida, Massachusetts, Maryland, Maine, North Carolina, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, South Carolina, Virginia, Vermont) and Washington, D.C.

• The autopay discount for some mortgage programs requires a TD Bank checking account.

Best for conventional loan refinancing

Bank of America mortgage

The Yahoo view: Bank of America mainly offers conventional loan refinancing. If you’re looking to refi an FHA loan or VA mortgage, you might want to go somewhere else.

Stars: 3.90

Read our full Bank of America mortgage review

Key benefits

• You can enter your address in BofA’s Real Estate Center and get an idea of how much your home is worth with a map of comparable sales and a value history chart. That’s important information to have when considering a refinance.

• Bank of America existing customers may qualify for interest rate or origination fee discounts.

• Sample refinance mortgage rates are based on the home value, current loan balance, and ZIP code.

Need to know

• Unfortunately, sample mortgage rates cannot be customized by credit score and are based on a FICO score of 740 or higher.

• Bank of America is highly rated for customer satisfaction by J.D. Power.

Best for FHA and VA refinancing

Pennymac mortgage

The Yahoo view: Pennymac is a specialist in refinancing government-backed loans, such as FHA and VA mortgages. It also stands out for its low interest rates.

Stars: 3.80

Read our full Pennymac mortgage review

Key benefits

• Pennymac has garnered multiple best-of awards from Yahoo Finance, including as a leading VA and FHA lender.

• Offered the lowest median mortgage interest rate of all Best Refinancing Lender finalists, according to a Yahoo Finance analysis of 2023 Home Mortgage Disclosure Act data.

• A Flex-Term refinance allows you to choose your payoff date.

Need to know

Dig deeper: Best VA loan lenders

Best for refinancing larger loans

Rate

The Yahoo view: Rate offers all the popular mortgage options but stands out for making higher-value refinance loans.

Stars: 3.80

Read our full Rate mortgage review

Key benefits

• Rate, formerly Guaranteed Rate, offered the highest median loan amount among Best Refinance Lender finalists, according an analysis of 2023 HMDA data. Rate’s median loan amount was $335,000. Contender median loan amounts ranged from $105,000 to $295,000.

• Compared to other nonbank and legacy online lenders, Rate stands out by having 500 branch office locations across the nation.

• Rate offers non-qualified mortgages for borrowers who are self-employed or need alternative credit approval.

Need to know

• As of the time of writing, advertised refinance interest rates are discounted with prepaid mortgage points ranging from 0.857 to 1.239.

• Customer satisfaction is well below average in J.D. Power’s survey.

Dig deeper: What are today’s mortgage refinance rates?

Best for online resources

U.S. Bank mortgage

The Yahoo view: U.S. Bank receives our highest rating — five stars — for online learning resources.

Stars: 3.80

Read our full U.S. Bank mortgage review

Key benefits

• The U.S. Bank Financial IQ is a rich resource of calculators, podcasts, videos, and articles. The mortgage refinance costs calculator is particularly useful.

• Current customers can receive up to $1,000 in closing costs credits.

• Loan prequalification “takes five minutes” with no impact to your credit score.

Need to know

Best for lowest refinance loan costs

Fifth Third Bank mortgage

The Yahoo view: While it serves less than a dozen states, Fifth Third Bank mortgage impresses with the lowest loan costs among its peers.

Stars: 3.60

Read our full Fifth Third Bank mortgage review

Key benefits

• Fifth Third Bank offered the lowest median refinancing loan costs among other Best Refinance Lender finalists in 2023, according to our analysis of HMDA data.

• Customers can earn a refinancing rate discount by using autopay.

• The Rate Drop Protector Program waives lender fees on a future refi if mortgage rates drop after you refinance.

Need to know

• Serves borrowers in Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, South Carolina, Tennessee, and West Virginia.

Best for USDA refinancing

CMG Financial mortgage

The Yahoo view: Of all of the government-backed loan programs, USDA mortgages are unique in that they cater to borrowers looking to refinance rural properties. CMG Financial mortgage is a Yahoo Finance Best USDA lender.

Stars: 3.40

Read our full CMG Financial mortgage review

Key benefits

• CMG Financial offers a helpful online guide that walks you through the why and how of a refinance.

• A USDA loan most often allows no down payment.

Need to know

Dig deeper: A guide to USDA streamlined refinance loans

How to refinance a mortgage

When you think of mortgage refinancing, you may immediately focus on interest rates. But there are other reasons to replace your home loan with a new one. You may be looking to:

Deciding to move ahead with a refinance requires some deliberation, information gathering, and goal setting. You’ll also have to gather some documents that the lender will be looking for.

Then, discuss those goals with two or three lenders to determine your best options.

Dig deeper: Mortgage refinance — How to get started

Types of mortgage refinancing

As we’ve mentioned, there are several mortgage refinancing options. Let’s take a quick look at the different types of refis.

Rate-and-term refinance

This is the core refinance loan — the one most people think of first. You replace your current mortgage with a new one that has a lower interest rate and perhaps a different repayment term length. The term (the length of time you wish to pay on the loan) is a choice you make when you structure your new loan. It can be shorter, longer, or the same as the payoff period of your existing mortgage.

Read more: How a rate-and-term refinance works

Cash-out refinance

Two things happen as you live in a house for a while: You pay down the balance you owe, called the principal, and the value of your house (usually) grows. That means you’ll have equity in your house. Typically, you can’t access that value until you sell your home unless you get a second mortgage for a home equity loan or line of credit — or a cash-out refinance.

With a cash-out refi, you take some of the value of your home out in cash and add it back to your loan balance.

Dig deeper:

Streamline refinance

Government loans offer simpler forms of refinancing that take less time and have fewer paperwork hurdles to clear. Called streamline refinances, they are available to homeowners with FHA, VA, or USDA mortgages.bottom-line

Dig deeper:

No-closing-cost refinance

Refinancing a loan is no small expense. If you don’t have some cash set aside for the closing costs, you may want to look into a no-closing-cost refinance.

The name of the loan is a little misleading, though. “No closing cost” is not accurate. There are the usual lender and third-party fees that come with a refinance, but you don’t pay them up-front. Instead, the expenses are added to your loan balance or baked into a higher interest rate.

Dig deeper: How a no-closing-cost refinance works

Cash-in refinance

Here’s a refi spin you may not be familiar with: a cash-in refinance. It’s exactly what it sounds like, but you may wonder why it’s a thing.

How it works: You take a lump sum of cash, apply it to the loan principal as a down payment, and, in effect, shrink your mortgage. As a result, your new loan is likely to have a lower interest rate. You might even pay the loan off earlier and save even more interest. It can be an interesting option to explore if you’ve come into some cash and are looking for ways to put it to good use.

Learn more: What is a cash-in refinance, and how does it work?

Short refinance

Another specialized refinance product is the short refi. It’s an emergency financial maneuver when you are so late on your mortgage payments that you are at risk of foreclosure.

If you can convince your lender that you can make the payments on a restructured refinance, the lender agrees to a new loan for less than the original mortgage. There are credit history and tax consequences to consider, but if you’re in a default danger zone, it may be a worthy resolution.

Read more: How a short refinance works

Reverse mortgage

Of the seven home refinance options, this may be the most innovative, particularly for seniors looking for a boost in financial security. For homeowners aged 62 and over who own their house or have it nearly paid off, a reverse mortgage generates an on-demand lump sum of cash or an income stream.

You still own the home but don’t make payments on the amount of equity withdrawn. Interest and fees accumulate over time as equity in the house is reduced. The loan balance is due when you no longer live there and is usually paid from the proceeds of a sale. In the meantime, there are closing costs, tax payments, and insurance premiums to pay. A reverse mortgage is a complicated transaction and requires careful consideration.

Find out more: What is a reverse mortgage?

Pros and cons of refinancing a mortgage

The longer you live in a home, the more you may think about refinancing. It can be a tempting proposition. It is also a wealth-building move, if done for the right reasons.

Some pros and cons of refinancing a mortgage:

Pros

• The potential to lower your interest rate

• The possibility of lowering your monthly payment

• The ability to pull cash out of your home’s value

• The opportunity to pay off your house sooner

Cons

• Lender and third-party fees that are included in the closing costs

• Paying more interest over the life of the loan if you extend the mortgage term

• The risk of adding to your debt load

Dig deeper: The pros and cons of refinancing your home

When it makes sense to refinance your mortgage

If you can improve your financial situation, a home loan refinance is a good idea. Hopefully, it’s a long-term improvement.

The most obvious good reason to refi is when interest rates fall enough to make the cost of a refinance worthwhile. However, even that is not a smart money decision if you move before you break even on the closing costs.

For whatever reason you’re considering a mortgage refinance, it has to pass a math test. When you weigh the costs versus the benefits from a bottom line numbers analysis, you’ll know when it makes sense to fire up a new mortgage loan.

Dig deeper: 6 times it makes sense to refinance your mortgage

Is now a good time to refinance your mortgage?

It absolutely can be. Mortgage rates are moving lower. As of Q1 2024, Americans had a record-setting $33 trillion in home equity. The economy is strong and steady.

As we’ve noted above, there are many reasons for refinancing. It’s just a matter of knowing your financial objective and setting the proper targets for the timing.

Read more: Is now a good time to refinance your mortgage?

Mortgage refinance rates

Yahoo Finance monitors mortgage rates daily. It’s easy to track where a home loan rate is with your preferred rate in mind. Remember, these rates are national averages. The rate you earn will depend on your creditworthiness, debt load, and the type of mortgage you are considering.

Dig deeper: See today’s mortgage refinance rates

How long does it take to refinance a mortgage?

You might think it would be a lot faster than getting the original mortgage, right? Not so much. You can count on four to six weeks from application to closing.

Dig deeper: How long does it take to refinance a mortgage?

How soon can you refinance your mortgage after buying a house?

The waiting period for getting a refinance after buying a house, often referred to as a seasoning requirement, varies according to what type of mortgage you have. There is no seasoning rule for the most common mortgages, called conventional loans.

For government loans, the waiting period can be from 210 days to a year. One complication: Lenders can have their own conditions that may impact the refinancing timeline.

Read more: How soon can you refinance a mortgage after buying a house?

How often can you refinance your mortgage?

If you can qualify through a lender and comply with any applicable waiting periods noted above, you can refinance as many times as you like.

Dig deeper: How many times can you refinance your home?

How to refinance a mortgage with a bad credit score

Refinancing a mortgage can improve your financial standing over time. But what if you have a bad credit score? You want to improve your credit but think you can’t qualify for a refi. We’ve got good news: Some refinance programs, particularly for government loans, are designed to improve your creditworthiness and have very lenient borrowing standards.

If you have an FHA, VA, or USDA loan, talk to an approved mortgage lender and determine your options. Streamline refinances for these loans might be just what you’re looking for.

Conventional loans also have refinance programs for borrowers who are financially fragile. Talk to a lender or two to talk about the possibilities.

Learn more: 9 options to refinance a mortgage with bad credit

How refinancing affects your credit score

It’s a bit ironic that using credit can mean your credit score takes a short-term hit. It’s one of the mysteries of the FICO game we play. The key is “short-term.” Whenever you have credit inquiries or open a new account, your score can be negatively impacted by a minor amount.

However, you are replacing your old mortgage with a new one. So, the former loan will register as paid off soon enough. Know the ins and outs of credit score ups and downs so that you aren’t surprised.

Read more: Does refinancing a mortgage hurt your credit score?

Mortgage lenders that did not make our list of the best refinance lenders

We considered the following mortgage lenders for our best-of list, but they weren’t quite as strong as our top picks:

However, just because these lenders didn’t make our Best Mortgage Refinance Lenders list doesn’t mean that any one of them won’t be a good fit for your home refinance. Read our individual mortgage lender reviews to learn more about any company you are considering.

Best refinance mortgage lenders: FAQs

Is it better to refinance with your current lender?

The best lender to refinance your mortgage is the one that offers the most favorable loan deal. Sure, you’ll want to give your current lender a crack at the repeat business, but shopping a couple of other home loan providers helps you find the best combination of low fees and an affordable interest rate.

Are refinance rates going to drop?

Refinance mortgage rates are already starting to move generally lower. Just before — and following — the Federal Reserve’s recent interest rate cut, with indications that more are on the horizon, mortgage rates began trending lower. However, rates make incremental moves in either direction every day. And it’s important to remember that headline mortgage rates are often for home purchases. Refinance rates are usually a bit higher.

Which mortgage lender has the lowest refinance interest rate?

Yahoo Finance assesses mortgage lender interest rates using the latest available Home Mortgage Disclosure Act (HMDA) data. Of the finalists in our Best Mortgage Refinance Lenders list, Pennymac mortgage had the lowest median interest rate.

Yahoo Finance mortgage lender methodology

Yahoo Finance identified the best mortgage lenders for each type of loan by analyzing and grading leading national lenders, which were compiled and sorted by loan volume from 2023 Home Mortgage Disclosure Act data. The lenders were then scored on a quintile scale for five criteria: the median interest rate offered to borrowers, rate transparency, median fees and loan costs, affordability factors including loan offerings and down payment assistance, and online educational resources and calculators featured on lender websites.

Review of the Nationwide Multistate Licensing System’s data on regulatory actions enabled a 5% penalty to the score of any lender with a mortgage-related administrative or enforcement action within the past five years.

This article was edited by Laura Grace Tarpley.