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Homeowners still have time to lower their monthly mortgage payments by refinancing as mortgage rates are still relatively low. Homeowners who wish to save money by locking in a lower rate, reduce the length of their mortgage and access some of their home equity without selling their house, now is an ideal time to crunch the numbers to see if refinancing makes sense.
Before you refinance your home, you should shop around for a lender that will offer you the best rate and repayment terms that suit you. Forbes Advisor reviewed some of the largest lenders who offer some of the most competitive rates and low fees, which are key criteria for refinancing.
3 days or less
Lower than the national average
35-day average
Flagstar Bank offers a low APR and low fees both online and at its branch locations in Indiana, Michigan, Ohio and Wisconsin. Borrowers need a 620 credit score to qualify for a mortgage refinance, although other lending products have lower credit score requirements.
“Flagstar is unique because we have both the traditional lineup of home lending solutions backed by investors such as Fannie Mae, Freddie Mac and Ginnie Mae, plus our own specialty products that we can put in portfolio on our balance sheet, given we’re also a bank,” says Lee Smith, president of mortgage for Flagstar Bank.
The lender also offers several discount programs, including discounts for borrowers whose employers have a relationship with Flagstar, incentives for returning customers and discounts for first responders, active military and veterans.
Available in All 50 States
Flagstar is a nationwide mortgage lender with 87 retail locations in 29 states and licensed to lend in every state.
How to Apply
Flagstar Bank offers several ways for customers to get a mortgage. They can apply online or visit a lender in person at branch locations in 29 states.
Customer support hours, including for email, phone and online chat, are Monday through Friday, 7:30 a.m. to 9 p.m. ET and Saturday 8:30 a.m. to 6 p.m ET.
Speed
Preapproval time is less than three days. The lender’s average closing time is 35 days, which is shorter than the industry average. In some cases, closing can occur in as few as 11 days.
Credit Requirements
Flagstar Bank has mortgage products with minimum credit score requirements of 580, although you’re only eligible to refinance a mortgage with a 620 minimum credit score.
The lender considers alternative credit data, such as rent and utility payments, when reviewing mortgage applications.
Loan Types Offered
Flagstar Bank offers fixed and adjustable-rate conventional and jumbo mortgages (ARMs), FHA, VA and USDA loans. It also offers construction and renovation loans as well as specialty loans, which include loans for multiple properties and loans in high-cost areas. Home equity loans are available in limited areas.
Loan Type | Yes | No |
---|---|---|
Conventional | ✓ | |
FHA | ✓ | |
VA | ✓ | |
USDA | ✓ | |
Jumbo | ✓ | |
ARM | ✓ | |
Home equity loan | Limited | |
Specialty | ✓- Multiple Property Loans, High Balance Loans and Jumbo Adjustable Rate |
20 minutes or less
Within 1-3 basis points above or below the national average
30 to 45 days
Better delivers convenience in many ways. It’s completely digital, so you can apply and close from anywhere in the world. Preapproval time is quite fast—applicants can expect to get a rate quote and preapproval in about 20 minutes. The lender also has developed technology to automatically look for discounts customers might be eligible for, without any extra effort or cost on the borrower’s part.
Better doesn’t charge commission or lender fees—that includes application, underwriting and origination fees. According to Better, the commission-free business model saves approximately 1% of the loan amount. This equates to a savings of $19,000, on average, over the life of a loan.
Available in Most States
Better.com is available everywhere in the U.S. except Hawaii, Massachusetts, Minnesota, Nevada, New Hampshire, Vermont and Virginia.
How to Apply
The application process is 100% online. In fact, in 2016 Better funded its first loan without a single phone call. For people who like automation, this is where Better shines.
Because there are no in-person locations, customers will have to rely on email and phone correspondence with loan professionals. Customer support, including for email, phone and online chat are Monday through Friday, 9 a.m. to 9 p.m. ET; and Saturday and Sunday, 10 a.m. to 6 p.m. ET.
Speed
Better mortgage preapproval time takes less than 20 minutes for borrowers who are not required to supply additional information. Those who must submit proof of self-employment income, monetary gifts or additional assets may encounter longer preapproval times. The lender’s average closing time is 32 days, which is 10 days faster than the industry average.
Credit Requirements
Better requires a minimum credit score of 620.
Loan Types Offered
Bettter.com offers fixed- and adjustable-rate conventional and jumbo mortgages (ARMs), FHA loansand bridge loans. It doesn’t offer VA or USDA loans.
Loan Type | Yes | No |
---|---|---|
Conventional | ✓ | |
FHA | ✓ | |
VA | ✓ | |
USDA | ✓ | |
Jumbo | ✓ | |
ARM | ✓ | |
Home equity loan | ✓ | |
Specialty | ✓ - Interest-only Mortgages |
1 to 2 days
Lower than the national average
21 to 30 days
Mortgage borrowers can count on average fees and competitive interest rates, tracking just below the national average.
If you’re a VA borrower (or refinancing a VA mortgage), Guaranteed Rate waives all loan fees. Minimum credit score requirements are lower than average. For example, the minimum FICO requirement for a conforming mortgage and USDA loan is 620 and just 600 for FHA and VA mortgages.
Available in All 50 States
Guaranteed Rate is available online everywhere in the U.S. and has more than 300 branches nationwide.
How to Apply
Guaranteed Rate offers both branch locations and online access to borrowers who want to apply for a mortgage. Their paperless application process allows borrowers to send paperwork electronically as well as apply and keep track of the application process online.
Borrowers can apply online or in person at one of their locations. Customer support is available by phone Monday through Friday, 8:30 a.m. to 7:30 p.m. CST and Saturday 9 a.m. to 2 p.m. CST.
Speed
Preapproval times are not as fast as other lenders, with a one- to two-day turnaround on preapproval letters.
Credit Requirements
Guaranteed Rate minimum credit score requirements differ depending on the mortgage. The lender offers loan options for buyers with credit scores as low as 600. The minimum requirements for each program are:
Loan Types Offered
Guaranteed Rate offers mortgages for both buyers and refinancers. Its product line includes fixed and adjustable-rate (ARMs) conventional and jumbo mortgages, FHA, USDA and VA loans, as well as interest-only mortgages.
Guaranteed Rate doesn’t offer home equity loans or home equity lines of credit.
Loan Type | Yes | No |
---|---|---|
Conventional | ✓ | |
FHA | ✓ | |
VA | ✓ | |
USDA | ✓ | |
Jumbo | ✓ | |
ARM | ✓ | |
Home equity loan | ✓ | |
Home equity line of credit | ✓ | |
Specialty | ✓- Interest-only mortgages |
Less than three days
Lower than the national average
30 to 40 days for purchase closings
Established in 1935, PenFed is one of the country’s largest member-owned credit unions. PenFed doesn’t require that you be part of the military to join. For people outside of the military, membership requires a small donation ($10-$15) to a specified charity.
PenFed offers competitive rates and a low APR. Additionally, homeowners who want to refinance will not have to pay any lender fees; they’re just responsible for third-party fees such as appraisal, title, credit report and any other service required to process the mortgage.
PenFed operates in all 50 states, Washington, D.C., Puerto Rico and Guam. The lender has a handful of branch locations in Maryland, Virginia and Washington D.C., but members also can apply online.
The Mortgage Member Benefits Program is a simple, three-tier lender credit for up to $2,500. The amount you save is based on your loan amount, so the bigger the loan, the more the savings.
Available in All 50 States
Although you can apply online, PenFed offers branches in Maryland, Virginia and Washington, D.C.
How to Apply
Borrowers can begin their application process online. Customer support by phone is available Monday through Friday from 7 a.m. to 11 p.m. ET, Saturday from 8 a.m. to 11 p.m. ET and Sunday from 9 a.m. to 5:30 p.m. ET.
Speed
Loan preapproval takes less than three days. The average closing time is 35 days, which is shorter than the industry average. In some cases, closing can be as short as 11 days.
Credit Requirements
Borrowers must have a minimum credit score of 620 for conventional and VA loans. For jumbo loans, the minimum credit score is 700.
Loan Types Offered
PenFed offers fixed conventional, jumbo and VA mortgages as well as home equity loans and refinancing.
Loan Type | Yes | No |
---|---|---|
Conventional | ✓ | |
FHA | ✓ | |
VA | ✓ | |
USDA | ✓ | |
Jumbo | ✓ | |
ARM | ✓ | |
Home equity loan | ✓ | |
Specialty | ✓ |
24 hours
About 3+ basis points higher than the national average
Average closing time is 47 days
Quicken Loans is one of the largest mortgage lenders in the U.S. Offering a completely online experience, with flexible customer service hours, borrowers can access customer service day and night.
Competitive mortgage rates are one of the top advantages Quicken Loans offers. Currently, Quicken’s average interest rates track above the national average.
Quicken Loans was ranked the best mortgage servicer by consumers in 2020, which makes it the seventh straight year it’s received this honor, according to J.D. Power’s annual consumer survey.
Available in All 50 States
Quicken Loans is an online lender, with four branch locations in Charlotte, Cleveland, Detroit and Phoenix.
How to Apply
Borrowers can apply online. Customer support hours, including for email, phone call and online chat, are Monday through Friday, 7 a.m. to midnight ET; and Saturday and Sunday, 9 a.m. to midnight ET.
Speed
Quicken Loans has three types of preapprovals: a prequalified approval (which is basically a prequalification); a verified approval (this is a traditional preapproval, where the lender verifies your income, assets and credit score) and a RateShield Approval2. The RateShield Approval2 goes a step beyond the preapproval and allows you to lock in your interest rate for 90 days.
The loan closing process is slower than average, taking about 47 days.
Credit Requirements
Quicken Loans requires a minimum credit score of 620. The lender considers alternative credit data, such as rent and utility payments, when reviewing mortgage applications.
Loan Types Offered
Quicken Loans’ product line includes fixed and adjustable-rate mortgages (ARMs), conventional and jumbo mortgages, FHA loans and VA loans. One of its unique offerings is YourGAGE, a fixed-rate mortgage that allows you to choose a custom term from eight to 29 years. Finally, its FHA Streamlineproduct allows existing FHA borrowers to refinance into a lower rate with less paperwork and no appraisal required. The lender doesn’t offer USDA loans, home equity loans or HELOCs.
Loan Type | Yes | No |
---|---|---|
Conventional | ✓ | |
FHA | ✓ | |
VA | ✓ | |
USDA | ✓ | |
Jumbo | ✓ | |
ARM | ✓ | |
Home equity loan | ✓ | |
Specialty | ✓- YOURgage Flexible-Term Mortgage |
3 minutes
1-3 basis points of the national average
36-day average
Ally offers competitive rates and standard lender fees, which range from 2% to 5% of the loan.
Ally customers can track their progress online, e-sign documents and upload files at any time and from anywhere. As long as you have an internet connection, you can do most of the work remotely.
Available in Most States
Ally is available everywhere in the U.S. except Hawaii, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New York, Vermont, Virginia and Wyoming.
How to Apply
The application process is 100% online. Borrowers will meet in person to sign closing documents.
Because Ally has no brick-and-mortar locations, customers will have to rely on phone correspondence for customer support. The only customer support option is by phone Monday through Friday, 9 a.m. to 9 p.m. ET and Saturday 10 a.m. to 6 p.m. ET.
Speed
Ally’s mortgage preapprovaltime is extremely quick, taking about three minutes. Documents required include tax returns, credit report, identification (driver’s license or passport), monthly bank statements and monetary gift letter (if applicable). For borrowers who are asked to supply additional information, such as proof of income for self-employed borrowers, monetary gifts or additional assets, the preapproval time might be longer. The lender’s average closing time is 36 days.
Credit Requirements
Ally requires a minimum credit score of 620.
The lender considers alternative credit data, such as rent and utility payments, when reviewing mortgage applications. Alternative credit data takes into account payments you make that are not traditionally included in credit reports. This can help borrowers who might not have a long credit history or had a prior bankruptcy show a good track record with on-time payments in areas that are not usually counted in traditional credit data.
Loan Types Offered
Ally offers fixed- and adjustable-rate conventional and jumbo mortgages and HomeReady Loans. It doesn’t offer FHA, VA or USDA loans.
Loan Type | Yes | No |
---|---|---|
Conventional | ✓ | |
FHA | ✓ | |
VA | ✓ | |
USDA | ✓ | |
Jumbo | ✓ | |
ARM | ✓ | |
Home equity loan | ✓ | |
Specialty | ✓ - HomeReady Loans |
1 to 3 days
N/A
17-day average
Guild Mortgage offers both in-person and online mortgage services. With office locations in 31 states, borrowers who prefer to do business face-to-face can visit a branch location. Conversely, borrowers in 48 states (not in New York and New Jersey) can apply online through its MyMortgage digital mortgage program.
Guild Mortgage is a great option for borrowers with lower credit scores, as its minimum requirement is 600—about 20 points less than what the average lender requires. Applying for a home loan through Guild Mortgage is also relatively easy and fast, making it an excellent choice for people who can’t afford to wait.
Tech-forward, Guild Mortgage provides services like auto-matching customers with down-payment help from state and local programs, which is ideal for people who might not have time to do the research themselves.
For buyers in a hurry, the lender offers a Homebuyer Express 17-Day Closing Guarantee program. This is considerably faster than the industry average of 43 days to close, according to Freddie Mac. The guarantee states that the lender pays $500 toward closing costs if the loan doesn’t close on time due solely to a Guild Mortgage delay.
Available in Most States
Guild Mortgage is available online everywhere in the U.S. except in New York and New Jersey. There are branch locations in 31 states, including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and Wyoming.
How to Apply
Guild Mortgage offers both branch locations and online access to borrowers who want to apply for a mortgage. Their paperless application process allows borrowers to send paperwork electronically as well as apply and keep track of the application process online.
Phone support is very limited, operating only Monday through Friday from 6:00 a.m. to 5:00 p.m. PT; the lender is closed on weekends.
Speed
Preapproval times are not as fast as other lenders, with a one- to three-day turnaround on preapproval letters. However, Guild Mortgage offers a 17-day closing guarantee, which can be attractive for borrowers who need to close quickly.
Credit Requirements
Guild Mortgage minimum credit score requirements differ depending on the mortgage. The lender offers loan options for buyers with credit scores as low as 600. The minimum requirements for each program are:
Loan Types Offered
Guild Mortgage offers mortgages for both buyers and refinancers. Its product line includes fixed and adjustable-rate (ARMs) conventional and jumbo mortgages, FHA, USDA and VA loans. The lender’s MH Advantage program is tailored to borrowers who are purchasing a manufactured home. Per Fannie Mae guidelines, MH Advantage borrowers must have a minimum credit score of 620. Guild Mortgage also offers FHA renovation loans and reverse mortgages.
For new construction, the lender offers its StrongStart Program. StrongStart allows for a builder’s closing-cost credit to be used toward the interest on the first three months of a borrower’s monthly mortgage payments. This program is offered with FHA and VA financing (standard and high balance limits).
Guild Mortgage doesn’t offer home equity loans or home equity lines of credit.
Loan Type | Yes | No |
---|---|---|
Conventional | ✓ | |
FHA | ✓ | |
VA | ✓ | |
USDA | ✓ | |
Jumbo | ✓ | |
ARM | ✓ | |
Home equity loan | ✓ | |
Specialty | ✓- StrongStart Program; MH Advantage Program |
20 to 30 minutes
Lower than the national average
Average closing time is 45 days
PNC offers some of the lowest interest rates and APRs for refinancing your mortgage.
PNC also offers an innovative online experience called Home Insight, which provides a home affordability analysis, a monthly payment estimator that accounts for insurance and taxes.
PNC also offers a full digital preapproval application, where borrowers may apply online and receive approval in a matter of minutes.
Available in All 50 States
PNC has branches for borrowers more comfortable with a brick-and-mortar experience in the following states: Alabama, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts,Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.
How to Apply
Borrowers can apply online or in person at a bank location. Customer support by phone is available Monday through Thursday from 8 a.m. to 9 p.m. ET, Friday from 8 a.m. to 5 p.m. ET and Saturday from 9 a.m. to 2 p.m. ET.
Speed
Preapproval takes between 20 to 30 minutes. The average closing time is 45 days, which is about the industry average. In some cases, closing can be as short as 30 days.
Credit Requirements
Borrowers must have a minimum credit score of 620. For jumbo loans, the minimum credit score is 700.
Loan Types Offered
Loan Type | Yes | No |
---|---|---|
Conventional | ✓ | |
FHA | ✓ | |
VA | ✓ | |
USDA | ✓ | |
Jumbo | ✓ | |
ARM | ✓ | |
Home equity loan | ✓ | |
Specialty | ✓ - Community (No PMI loan), Medical Professional Loan |
If you’re considering refinancing to lower your mortgage rate, then you’ll want to compare interest rates and fees by lender. Many lenders don’t disclose fees or even rates online so you might have to contact them and ask for a list of their fees and what their rates are.
In order to get an even more accurate description of how much the loan will cost you, you can apply for multiple loans and receive loan estimates based on your credit score, loan-to-value (LTV), debt-to-income ratio and other financial details.
It’s always a good idea to get multiple loan estimates when you’re trying to capture the lowest rate available. You can use the best estimate to negotiate with other lenders, which might result in getting a lower rate or reducing certain administrative fees.
When you’re shopping around, be sure to ask about any discounts—including appraisal waivers—that might be available to you. Some financial institutions offer discounts to existing customers; you might also find military discounts.
We reviewed 12 mortgage lenders that do business both online and in-person throughout the United States. The lenders we reviewed represent some of the largest mortgage lenders by volume, which include banks, credit unions and online lenders.
Our scoring methodology included capturing eight data points, with a focus on interest rate and loan fees.
The best lenders received a score of four stars or better and represented outstanding performance or services in one or more areas.
The following is the weighting assigned to each category:
Specific characteristics taken into consideration within each category include APR, average interest rate, origination fees, minimum credit score requirements, discounts and customer service availability.
We also offered bonus points up to 5% of the score when a lender considers alternative credit data.
The three most common types of refinance options are: rate-and-term refinance, cash-out refinance and cash-in refinance.
The rate-and-term refinance allows homeowners to lower their interest rate and/or change the term, which is the length of time borrowers must pay on their loan. For example, you might want to refinance your 30-year mortgage with a 3.5% interest rate into a 15-year mortgage with a 3% rate. This will help you lower the amount you pay in interest and pay off the mortgage faster.
A cash-out refinance gives homeowners the opportunity to access the equity in their home, with the option to also lower their interest rate.
A cash-in refinance is when homeowners apply cash to the principal, which can help them lower their loan balance, eliminate private mortgage insurance, get a better interest rate or qualify for a refinance.
Qualifying for a refinance is the same as qualifying for a purchase home loan, as lenders want to make sure you can afford the payments and that you will make them on time per your contract.
Although each lender has different requirements, generally all lenders will look at your credit score, debt-to-income ratio (DTI), income and home equity.
For conventional mortgages, a credit score between 620 and 720 is preferred. The credit score minimum might also depend on your cash reserves, DTI and the loan-to-value ratio. Also, lenders usually reward high credit scores with the lowest available interest rates.
FHA loans have lower minimums than conventional mortgage refinances, but some lenders might apply a credit overlay, which means they will raise the minimum score to offset risk:
There is no credit check for an FHA streamline refinance. There are also no credit score minimums for USDA or VA refinances; however, lenders might apply their own standards to these refinances.
Since your credit score is one area that borrowers have the most control over, here are some ways you can improve your score if you don’t yet qualify for a refinance.
Natalie Campisi is a Los Angeles-based reporter who covers mortgages and housing news for Forbes Advisor. Previously, she was the senior mortgage reporter and analyst for Bankrate. She’s also covered unemployment on Capitol Hill and news stories for the Tampa Tribune. Her work has appeared in publications such as CNBC, The Chicago Tribune, and MSN.