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Refinancing your mortgage can be a real hassle. It takes a lot of paperwork, there are usually closing costs, and then there's all the research. You have to figure out the right rate and term, and -- most importantly -- find the right refinance lender who's going to give you the best possible deal.
We can't solve the paperwork or closing costs for you (sorry!), but we've done the research to identify who we believe to be the best mortgage refinance lenders that are likely to offer the best refinancing rates.
No origination fees and a digital-only experience ensures borrowers cut costs while saving time. Case in point, borrowers can secure preapproval in minutes. Read Full Review
No lender fees for existing customers, along with a full online experience make it a top pick. One of the rare lenders to offer loans up to $25mm. Read Full Review
Few lenders can match the lineup of loan products and terms. The high-tech digital experience compliments the banks extensive branch network. The interest rate and fee discounts for Preferred Rewards members define what relationship banking should look like. Read Full Review
Led the transition to online-only applications and that seamless process is one reason which it has become the largest U.S. lender. Consistent JD Power customer service rankings make it hard to ignore. Read Full Review
Fast prequalification, membership discounts, and a modern experience explain its top pick status. A potential fit for self-employed borrowers, based on SoFi’s nontraditional underwriting process that focuses less on credit history and more on income and assets. Read Full Review
Among the most popular refinance and FHA/VA lenders in the market. Its Mello Smartloan platform eases the refinance process by digitally hooking up to confirm your assets, employment, and income. Read Full Review
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Refinancing a mortgage (or any other type of loan for that matter) refers to the process of obtaining a new loan -- typically with better terms -- for the purpose of replacing an existing one.
When it comes to mortgages, you can simply refinance your existing loan balance. Or, if you have significant equity in the home, you could choose to get a new loan for a higher amount and get some cash in the process.
The short answer is "it depends." Your refinancing rate depends on market conditions, your FICO® Score, and the loan-to-value ratio, or LTV ratio of your home. When refinancing, your goal should be to get an interest rate that is in-line with or better than the current market average for people with your credit score.
Refinancing your mortgage is a great way to access your home equity or change the financial circumstances around your mortgage. It can be a powerful weapon for a homeowner who's kept up with their mortgage payments.
You may want to refinance your mortgage if you're looking to:
Make sure you're doing a refi not just because you can, but because you need it to achieve your financial goals.
The main risk of refinancing is that it won't be as worthwhile as you think. We'll get into this a bit more in the next section, but a lower interest rate on your mortgage only makes sense if it saves you money relative to the cost of the loan itself.
It can also be risky if you're refinancing from an adjustable-rate mortgage to a fixed-rate loan, or vice versa. For example, let's say that you have a fixed-rate mortgage at 5% and you refinance to an adjustable-rate mortgage that has a 3% interest rate for five years, but then adjusts annually after that. If market interest rates spike, you can end up paying significantly more interest over time than you would if you had simply kept your existing mortgage.
The short answer is that refinancing isn't right for everyone, so it depends on your situation. It largely depends on how much it costs to refinance and how long you plan to stay in your home.
Refinancing your mortgage isn't free -- there will be some sort of lender fees and closing costs to worry about. If you plan to stay in your home long enough that you'll save more in interest than you pay to refinance, it can be a smart idea.
Here's a simplified example. Let's say that you can lower your monthly mortgage payment by $50 if you refinance, but it will cost you $2,000 in various fees to get the loan. Dividing $2,000 by $50 shows that you would need to stay in the home for at least 40 months for refinancing to be worthwhile.
Refinancing a mortgage refers to the process of obtaining a new home loan for the purpose of replacing an existing loan.
A "good" mortgage refinance rate depends on the current market conditions, your credit history, and other factors your lender takes into account.
If refinancing helps you accomplish your financial goals or saves you money over the long run, it can be a smart idea. Just make sure that any fees you pay are justified by the benefits of refinancing.
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