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By Gabriella Cruz-MartínezHeidi Rivera and Joan Pabón
Updated: March 1, 2021 3:30 PM ET | Originally published: January 11, 2021
house with calculator over it 2021 Money Best Mortgage Refinance
Money; Getty Images

Mortgage interest rates are projected to stay low well into 2021 and refinance applications are on the rise, with homeowners eager to take advantage of the best rates available. We’ve made the decision easier by compiling a detailed list of the best mortgage refinance companies, as an extension of Money’s Best Mortgage Lenders.

Money’s Best Refinance Companies of 2021

Quicken Loans: Best Mortgage Refinance Company Overall

Guild Mortgage Company: Best Mortgage Refinance Company for Airbnb

Bank of America: Best Mortgage Refinancing Company for Member Discounts

Loan Depot: Best for Online Mortgage Refinancing

Wells Fargo

Chase

Caliber Home Loans

Fairway Independent Mortgage Corporation

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We selected our top 4 picks for best mortgage refinancing companies, but our vetting method left out some of the largest loan originators in the US. We believe these providers are still worth mentioning in our Better Than Most section. However, continued improvement in areas like customer service and information accessibility is essential for them to rank higher.

Our Top Picks
Refinancing Lender JD Power Customer Satisfaction Rating Regulatory Actions with the NMLS Variety of mortgage products Information is accessible
Quicken Loans Among the Best 5
Guild Mortgage Co. Better Than Most 3
Bank of America About Average 2
Loan Depot About Average 4
Better Than Most
Refinancing Lender JD Power Customer Satisfaction Rating Regulatory Actions with the NMLS Variety of mortgage products Information is accessible
Wells Fargo About Average 9
Chase About Average 9
Caliber Home Loans The Rest 1
Fairway Independent Mortgage Corporation Better than Most 3

Money’s Best Refinance Companies Top Picks

Quicken Loans – Best Refinance Lender Overall

Highlights from Quicken

  • Rated best in the industry for customer support
  • Ranked as the nation’s top refinance originator by the MBA
  • Variety of loan products including adjustable-rate mortgage, 15- and 30-year mortgage, FHA, VA and USDA loans
  • Streamlined online application process with eClosing
  • Outperformed every other mortgage lender in 2020, even in government-backed loan originations
  • Features a mortgage refinance rates calculator

We chose Quicken Loans as the best refinance lender overall because of its great track record in customer satisfaction, in-depth digital software and web-based customer support. From tracking your budget to evaluating mortgage products, Quicken provides comprehensive tools to help borrowers manage their refinancing process totally online from start to finish.

Through Rocket Mortgage, Quicken’s digital platform, customers can import their property taxes and home insurance information automatically upon entering their address. Additionally, the company offers the ability to integrate digitally with your bank so it is not necessary to manually input account statements. Customers can also modify their rate, repayment term, and costs to see other payment options. The entire process can be completed using eClosing.

This not only resonates with tech-savvy borrowers, but frankly anyone else looking to refinance from home in the current climate of social distancing.

Another big win for Quicken is they basically offer every loan option under the sun. From conventional to ARM, short-term rentals, and government-backed loans, if you decide to go with the company you’ll have plenty of choices.

Rocket Mortgage has consistently ranked first place in the JD U.S Primary Mortgage Origination Satisfaction Study, outperforming other lenders every year. Although the company is deeply rooted in online technology, Quicken also has over 3,000 Home Loan experts available 7 days a week to help you complete your application over the phone.

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Guild Mortgage Company – Best Mortgage Refinance Lender for Airbnb Owners

Highlights from Guild Mortgage

  • Offers conventional, FHA, VA, USDA, and Airbnb refinance
  • Features a refinance rates calculator, total mortgage payment calculator, and helpful blog
  • Accepts LTVs as high as 97% for rate and term refi and 80% for cash-out refinancing
  • Considers alternative credit data such as utility bills and rental payment histories

Out of all the mortgage refinancing companies we vetted, Guild offered the most diverse array of mortgage products for borrowers in different financial circumstances. This includes those who may be facing financial hurdles like student loan debt or tight credit, as well as options for struggling Airbnb owners, which could be particularly advantageous considering the current world situation.

Guild’s Airbnb refinancing option is available for owner-occupied primary residences for borrowers with a loan-to value ratio of at least 97% for rate-and-term refinances, and 80% LTV for cash-out refinancing. Qualifying borrowers must also have a credit score of 620.

While other companies accept short-term rental income to qualify for certain loans, most require at least two years of evidence. Guild accepts 12 months, making it an ideal option for new and veteran hosts alike. That’s what makes it our best lender for Airbnb owners, new and veteran hosts alike.

Guild’s Airbnb program also enables borrowers to factor their short-term rental income on primary residences with multiple service providers, so it doesn’t just have to be Airbnb income. This added qualification muscle could potentially make Guild’s Airbnb-specific refinance easier to qualify for, compared with other home refinance providers.

To qualify, applicants must present an Airbnb Proof of Income Statement, proof of stable short-term rental income for the past 12 months.

Bank of America – Best Home Loan Refinance Lender For Member Discounts

Highlights from Bank of America

  • Offers conventional, 5/1 adjustable-rate mortgages, FHA, VA and USDA loans along with 15- and 30-year mortgages
  • Exclusive membership discounts available on both purchase and refinance closing costs
  • Physical branch locations available throughout the nation
  • Considers alternative credit data such as utility bills and rental payment history

As one of the nation’s leading mortgage leaders, Bank of America is well-suited to help you determine whether refinance is the right option. The company offers multiple types of refinancing options and home equity loans to choose from, including fixed-rate mortgages, adjustable-rate refinance loans, FHA and VA loans, and cash-out refinancing.

What makes Bank of America the top mortgage refinance company for member discounts, however, is its Preferred Rewards program. With this service, members can qualify for up to a $600 reduction of their purchase or refinance origination fees in closing costs.

The program is based on tiers ranging from Gold to Platinum Honors, with discount levels based on the tier for which each customer qualifies. A member’s tier is determined by qualifying balances in Bank of America banking and/or Merill investment accounts. Customers who have one of or both these accounts should definitely look into this as an option.

Another perk of doing business with Bank of America is that it has comprehensive digital services, including an online tool to track the progress of your mortgage loan and refinance application in real-time. While the company doesn’t state a credit score requirement on its website, you can consult a loan specialist to see if you qualify for refinance.

loanDepot – Best For Online Mortgage Refinance

Highlights from loanDepot

  • Mello SmartLoan
  • 200 locations throughout the country and over 1,700 affiliated licensed loan professionals
  • Fixed-rate mortgage, ARM loans, jumbo loans, VA and FHA loans and HARP loans

loanDepot is a well-reviewed mortgage loan provider with competitive loan products available, offering fixed- and adjustable -rate loans, jumbo loans and government-backed loans. loanDepot also boasts one of the lowest number of complaints out of all the companies we vetted, with only 217 filed against them in the Consumer Financial Protection Bureau (CFPB). However, where they really shine is with Mello SmartLoan, their online loan engine that streamlines the entire process, from application to closing.

Its Mello SmartLoan product employs artificial intelligence to take borrower information and search for a way to save you money, time or both, all in a matter of minutes. With this proprietary loan engine, the whole loan process, including the closing, can take place online and Loan Depot guarantees it can cut the time to close by up to 17 days.

Mello SmartLoan can swiftly calculate the best loan products that can lower interest rates and/or negotiate a shorter term. Despite innovating a fully digital process, loanDepot still has licensed loan consultants available who can help the consumer select the best mortgage product for their particular financial situation. By calling their lending officers, you can also request information on their mortgage rates, which are unfortunately not readily available on their website.

Lastly, choosing loanDepot for a mortgage refinance is rewarded with a lifetime guarantee. The company offers to waive lender fees and reimburse appraisal fees on future refinances after you’ve refinanced with them at least once.

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Better Than Most Mortgage Refinance Companies We Considered

Wells Fargo

Highlights from Wells Fargo

  • Second-largest originator of mortgage loans in the country
  • Variety of mortgage loan products including FHA, VA and Guaranteed Rural Housing programs, jumbo loans, 15-, 20- and 30-year mortgages and adjustable-rate mortgages
  • Traditional banking complemented with a powerful set of online tools that allow the borrower to get a rate quote, upload documents, verify employment, and e-sign for the loan
  • Loan consultants available in-person at a bank branch or by phone

Why it didn’t make the cut

  • Subject to several regulatory actions by the CFPB, for improper handling of mortgage loans and placing loans into forbearance without the borrower’s knowledge
  • High number of customer complaints with the Consumer Financial Protection Bureau (CFPB)
  • About Average rating in JD Power customer satisfaction survey

Chase

Highlights from Chase

  • Third-largest originator of mortgage loans
  • Large variety of loan products, including adjustable-rate mortgages, 10-, 15-, 20-, 25- and 30-year mortgage, FHA and VA loans and DreaMaker mortgage
  • Competitive mortgage interest rates
  • Online Refinance Learning Center, which provides a number of calculators you can use to preview different loan estimates, interest rates and terms, as well as refinancing guides and home buying resources to help you prepare for and keep track of your goals

Why it didn’t make the cut

  • Subject of several regulatory actions with the Consumer Financial Protection Bureau (CFPB) within the last five years (although none filed within the last three years)
  • High number of customer complaints with the Consumer Financial Protection Bureau (CFPB)
  • About Average rating in JD Power customer satisfaction survey

Caliber Home Loans

Highlights from Caliber Home Loans

  • Flexibility in terms of borrower qualifications
    • Considers payment history instead of credit score or debt-to-income ratio, which makes it a great option for those with low credit scores or the self-employed
    • Accepts borrowers with a DTI of up to 50%
    • Down payments can be as low as 3%
  • Streamlined application process
  • Variety of mortgage products including but not limited to adjustable-rate mortgages, 10- to 30-year fixed mortgage, FHA, USDA, VA and jumbo loans
  • Considers payment history instead of credit score or debt-to-income ratio, which makes it a great option for those with low credit scores or the self-employed
  • Accepts borrowers with a DTI of up to 50%
  • Down payments can be as low as 3%

Why it didn’t make the cut

  • Information related to interest rates and lender fees is not readily found on their webpage
  • Caliber charges a prepayment penalty and does not offer discounts that can reduce your mortgage interest rates
  • Below Average rating in the JD Power customer satisfaction survey

Fairway Independent Mortgage Corporation

Highlights from Fairway Independent Mortgage Corporation

  • One of the largest mortgage loan originators in the country, with over 400 locations
  • Better than Most rating in JD Power’s customer satisfaction survey
  • Loans products include adjustable-rate mortgage, conventional loans, fixed-rate mortgage, jumbo loans, FHA loans, USDA and VA loans

Why it didn’t make the cut

  • No accessible information relating to interest rates, required credit scores, minimum and maximum loan amounts, lender fees, and available discounts

Mortgage Refinancing Challenges During Covid-19

  • New “adverse market refinance fee,” effective December 1, 2020, is projected to drive up the costs of refinancing for the average borrower
  • Large volume of refinancing applications has lenders struggling to keep up with demand due to reduced staffing and working hours
  • Appraisers may not be permitted to enter your home to avoid potential contagion
  • Lenders are taking risk-lessening measures in response to rising unemployment numbers. These include tighter lending requirements, called mortgage overlays, that go beyond the minimum guidelines established by the government or financial institutions like Freddie Mac and Fannie Mae.

Home Refinance Requirements

There are three main considerations lenders take into account when you apply for refinance: credit score, debt-to-income ratio, and average loan-to-value ratio.

Debt-to-income ratio (DTI)

Your debt-to-income ratio consists of all of your monthly debt payments added up and then divided by your gross monthly income. The DTI helps lenders determine your ability to manage payments and plays a key role when you apply for refinance.

Last year, Fannie Mae increased their DTI ratio limit to 50%, up from 45%. Lenders usually require your debt-to-income ratio to be 50% or less to qualify for FHA loan refinance. Meanwhile, conventional loans may allow DTI ratios of up to 43%, according to the Consumer Financial Protection Bureau (CFPB). To get started, you can calculate your current DTI ratio here.

Credit Score

When you choose to refinance, lenders will evaluate your most recent credit report. There are many credit scores available, but most lenders look specifically at your FICO score. Experian, Equifax and My Fico are authorized FICO score retailers, but you can still obtain free copies of your credit report from the three main credit reporting bureaus — TransUnion, Equifax, and Experian — at annualcreditreport.com once a year. If your credit, income, savings, or amount of debt have improved since your last mortgage application, you may be eligible for a reduced interest rate on your loan.

Average Loan-to-Value Ratio (LTV)

The LTV is the amount of the loan you want to take out divided by the appraised value of your home. Most lenders require that borrowers have at least 20% in equity in order to qualify for refinance.

Some mortgage lenders are flexible in terms of equity requirements, however they will still request an appraisal to determine the actual market value of your home and calculate your equity. Having enough equity reassures borrowers that you won’t default on your new loan.

Things You May Need To Apply

When applying for a mortgage refinance, lenders will ask you for specific documents. Check out the list below to ensure you have everything you need:

✓ A copy of your government-issued ID or Social Security card
✓ A recent copy of your credit report
✓ Proof of income for the last 30 days
✓ W-2s for the past 2 years
✓ Federal tax returns (personal and business) for at least the last 2-3 years
✓ Written explanation if employed less than two years or if there’s a gap or change in employment
✓ Statements of outstanding debt, and all current expenses
✓ Address of property to be refinanced and purchase contract
✓ Homeowners insurance information such as the agent’s name and contact information
✓ Statements of assets
✓ Bankruptcy/ discharge papers if applicable
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FAQs

What is a home loan refinance?

Refinancing a mortgage involves replacing a current loan with a new one, with different terms, interest rates, or borrowed amount. In the best cases, refinancing can help you save money on your mortgage payments by negotiating low rates, or by reducing your term.

What are the benefits of refinancing?

  • Lowering your interest rate. You can take advantage of the best mortgage refinance rates and potentially save thousands of dollars over the life of the loan
  • Shortening the life of your loan. Extending your loan may result in a lower monthly payment with higher interest, while reducing your repayment plan to a shorter loan term may result in a higher monthly payment.
  • Consolidating debt & gaining cash with cash-out refinancing. A cash-out refinance replaces your current home loan with a new mortgage that’s higher than your outstanding loan balance, so you can withdraw the difference between the two mortgages in cash. You can consolidate high-interest debt from old credit cards. This will not only help you pay off your debt faster but can also save you hundreds to thousands of dollars down the line.
  • Getting rid of private mortgage insurance. You may be able to have your private mortgage insurance (PMI) removed if your new mortgage is 80% or less of the home’s current appraised value or loan-to-value ratio (LTV). Refinancing is the only option to cancel this type of insurance on most government-backed loans, such as Federal Housing Administration (FHA) loans. You will have to refinance your current loan from a government-backed loan to a conventional mortgage to get rid of PMI.
  • Reducing financial risk. If you have an adjustable-rate mortgage (ARM), shifting to a fixed-rate mortgage can secure your rate for the remainder of the loan. This lowers risk, as you no longer must worry about fluctuating interest rates.
  • Adding or removing a loan cosigner Lenders may ask you to prove that you can make monthly mortgage payments on your own. This will require some additional paperwork to document your income, debt, and credit history. The other cosigner may also have to provide evidence that they are willing to withdraw from the mortgage contract.

When to refinance a mortgage? Is now the right time?

Refinancing your mortgage is ideal when interest rates are favorably low. It provides a number of advantages such as consolidating debt, negotiating a shorter term, reducing monthly mortgage payments, adding or removing a person from your loan, and more.

But it comes at a cost. Standard lender fees may include origination, appraisal, attorney, courier, and underwriting fees, to name just a few, which can be as much as 5% of the total amount of the loan. Together, these make up the annual percentage rate (or APR) of your loan.

While current record-low interest rates make refinancing highly attractive, always make sure it’s the right move for you. If done wrong, it could potentially result in higher mortgage interest rates and a mortgage payment you can’t afford.

What’s the difference between a loan modification and a refinance?

A loan modification is an agreement that changes the terms of your existing mortgage loan, to lower your payments, interest rate, or both, just like a refinance would. The main difference is that this type of loan requires much less paperwork and it’s more cost-effective, since you’re able to skip most of the lender fees, closing costs and origination fees tied to a traditional mortgage refinance.

To qualify for a loan modification, borrowers should be current on their payments. Other requirements may vary depending on the lender, but you may have to provide evidence of financial hardship, such as medical statements, divorce papers, or proof of income loss.

It’s worth noting that some lenders may offer to reduce mortgage rates with a loan modification even if a borrower isn’t having trouble making payments.

When is refinancing a bad idea?

Refinancing is not recommended in the following scenarios:

  • It doesn’t save money once you add up closing costs
  • Closing costs are not affordable
  • There is a high break-even point
  • It lowers monthly mortgage payment but costs more over the life of the loan.

Can I refinance with my current lender?

Yes, you can refinance and renegotiate the terms of your current loan with your lender, but it is still wise to shop around and request loan estimates from multiple lenders. You might find lender offers that are better deals in terms of refinance rates, loan products and closing costs.

Can I refinance a second property?

Yes, you can refinance a second home or property, but lenders will have guidelines you must meet to qualify. Be aware of the distinction between a second home and an investment property, because it will affect the interest rate. Investment properties run about 1 percentage point above owner-occupied residential mortgages, according to Keith Gumbinger, Vice President of HSH Associates.

Can I refinance an underwater mortgage?

A mortgage is considered underwater when the borrower owes more on their mortgage than what the property is worth. Underwater mortgages can still be refinanced through Fannie Mae’s HARP replacement program, also known as the High LTV Refinance Option (HIRO).

Fannie Mae’s HIRO program is available to homeowners that are current on their mortgage payments and have a loan-to-value (LTV) ratio that exceeds the maximum amount for standard cash-out refinancing.

Key Refinancing Terms

Rate-And-Term Refinance

Also known as a “no cash-out refinance,” a rate-and-term refinance adjusts the interest rate or the term (or both) of an existing mortgage while its balance stays the same. This option often has a lower interest rate than cash-out loans.

 

Zero-Closing-Cost Refinance

Some lenders offer “no-closing-costs” or “zero-closing-costs” refinance loans for those who qualify. These loans let you roll up closing costs into your mortgage loan. You still have to pay closing costs and interest on those fees, just not upfront.

 

Cash-Out Refinancing

Cash-out refinancing converts the difference in home equity into cash. You’re essentially replacing your existing mortgage loan with a new loan that’s higher than your current mortgage balance. In turn, you get the difference in home equity as a tax-free cash advance paid you at closing.

What To Watch Out For: The borrower may have a higher interest rate through a cash-out refinance. Keep in mind to borrow an amount that is feasible to pay off as well.

Cash-In Refinance

A cash-in refinance refers to the act of paying down an existing mortgage to lower your mortgage balance during a refinance negotiation. Contrary to cash-out refinancing, this option may improve chances of an underwater mortgage qualifying for a refinance. Generally, an LTV ratio of at least 80% is required by most lenders to refinance.

Streamline Refinance

This is a refinance option for government-backed loan programs that allows borrowers to bypass low- or no-income documentation or underwriting. These loans don’t require appraisals, in most cases only employment verification.

 

Methodology

Customer experience

We looked at the refinance loan offers of the largest lenders in the industry and the ways in which they’re simplifying the application process for these types of mortgage products. We considered lenders that provided online tools, discounts, or exclusive refinance programs.

Data analysis

We considered lender size and reach, and reputation for customer satisfaction. To determine lender originations, we relied on the 2020 report from the Mortgage Bankers Association. As for customer sentiment, we consulted the J.D. Power’s U.S. Primary Mortgage Origination Satisfaction Study.

Consumer feedback and expert input

We vetted each based on the most important attributes of a lender according to expert interviews and consumer feedback from a short poll that ran on Money’s social media platforms. After weighing professional and consumer opinion accordingly, we identified our three top picks from the mortgage refinance industry.

Summed Up List of the Best Refinance Companies

Top Picks

  • Quicken Loans: Best Refinance Company Overall
  • Guild Mortgage Company: Best Mortgage Refinance Company for Airbnb Owners
  • Bank of America: Best Mortgage Refinancing Company for Member Discounts
  • Loan Depot: Best for Online Mortgage Refinancing

Better Than Most

  • Wells Fargo
  • Chase
  • Caliber Home Loans
  • Fairway Independent Mortgage Corporation