Best Lenders for Refinancing Your Mortgage
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With mortgage rates over 6%, refinancing might seem tough, but there are still good reasons to consider it. You could switch to a longer-term loan to lower your monthly payment or choose a shorter-term loan to save on interest.
A cash-out refinance lets you borrow more than you owe and take the extra money for things like home repairs or paying off debt. Just keep in mind that closing costs will vary based on your loan.
Overview of the best lenders for a mortgage refinance
- Best for no fees: Ally Home
- Best for the big-bank experience: PNC Bank
- Best for quick, online applications: Quicken Loans
- Best for refinancing smaller amounts: Discover home loans
- Best for a personal touch: Pen Fed Credit Union
- Best for multiple options: Chase
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Compare the best lenders for mortgage refinancing
Lender | Description | Origination fees | Credit score requirement | Types of loans |
Ally Home offers quick approval and a complete banking experience. | Ally does not charge lender fees, but you might be responsible for third-party fees | 620 | Conventional, jumbo, refinance | |
PNC Bank offers mortgage, refinance and home equity loans. | PNC does charge closing costs between 2% to 5% of the loan amount | 620 | Fixed-rate, adjustable-rate, jumbo, FHA, VA, USDA, reverse, HELOC | |
Quicken Loans changed its name to Rocket Mortgage in 2021 and is ideal for first-time home buyers. | Closing costs vary, but Quicken says most will pay 3% to 6% of their total loan amount | 620 | Fixed-rate, adjustable rate, jumbo, FHA, VA, HELOC | |
Discover Bank offers complete banking solutions with mortgage, refinance and home equity loans. | Discover charges no closing costs. | 680 | Mortgage refinance, HELOC | |
America’s second-largest credit union, Pen Fed serves over 2 million members. | PenFed charges no closing costs | 620 | Fixed-rate, adjustable rate, jumbo, FHA, VA, HELOC | |
JP Morgan Chase is well-known across the country with over 4,700 branches. | Chase does charge origination fees, though these fees will vary. | 700 | Fixed-rate, adjustable rate, FHA, VA, HELOC |
Best for no fees: Ally Home
Pros & cons
Pros
- Full suite of banking services.
- No closing costs.
- 100% online application process.
Cons
- No physical branches.
- Does not offer FHA and VA loans.
Closing costs: None
Refinancing a mortgage loan can be expensive. Lenders' closing costs in a refinance vary but typically range from 2% to 6% of the amount you are refinancing. If you are refinancing a mortgage of $250,000, you can expect to pay from $5,000 to $15,000. But if you refinance with Ally Home? You’ll pay less because this lender charges no lender fees.
What does that mean? Ally Home won't charge origination, application, processing, or underwriting fees, which can save you thousands of dollars. This doesn't mean that an Ally Home refinance is free. You might still have to pay for an appraisal to determine the market value of your home, and you might also have to pay for fees charged by third-party providers such as a title insurance company or real estate attorney. The lack of lender fees, though, will reduce your refinance costs.
Ally earns points, too, for speed. According to Ally, you can apply for a refinance online in as little as 15 minutes by completing the lender's question-and-answer application. You can also submit documents – such as the paycheck stubs, bank statements, and tax returns, you'll need to verify your income – online at Ally.com.
Your interest rate for your new loan will depend on your credit score and the type of loan you take out. Ally says every refinance is different but usually takes a few weeks to a few months to close a home loan with the bank.
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Best for the big-bank experience: PNC Bank
Pros & cons
Pros
- Access to 2,000+ branches.
- Excellent mobile app.
- Access to a live-loan officer.
Cons
- High closing costs.
- Online application requires speaking with a loan office.
Closing costs: 2% - 5%
Looking for a major lender that operates physical locations in all 50 states? PNC Bank might be the right choice. This national lender can provide you with access to a real-live loan officer no matter in which U.S. state you reside.
PNC Bank also offers a full range of refinance loans: fixed-rate loans in which your interest rate will never change; adjustable-rate mortgages in which your rate will stay fixed for a set number of years and then rise or fall typically once a year afterward; and jumbo loans if you need to refinance a larger amount of money. PNC also offers refinance loans insured by the Federal Housing Administration and the U.S. Department of Veterans Affairs.
PNC doesn't list a minimum FICO credit score to qualify for a refinance but does say that most successful applicants have average or better credit. PNC also says that most successful applicants have a debt-to-income rate of 43% or lower. This ratio measures the percentage of your gross monthly income that your monthly debts, including your estimated new mortgage payment, will take up. If your monthly debts eat up 43% or less of your gross monthly income, you'll have a better chance to qualify for a PNC refinance.
Visit PNC Bank
Or read Joywallet's review of PNC Bank.
American Homeowners Could Save Big With The Help Of U.S. Mortgage Experts
If you've owned your home for 3+ years, you may be able to get cash out of your home and slash your monthly bills. It costs $0 to get connected with an expert and check your options. You'll be shocked to see how much you could save.
Quicken Loans
Pros & cons
Pros
- 100% online application.
- Quick approval.
- Available in all states.
- User-friendly mobile app.
Cons
- High closing costs.
- High credit score requirement.
Closing costs: 3% - 6%
Want to apply for a refinance without ever speaking to a loan officer in person or even over the phone? Rocket Mortgage – formerly known as Quicken Loans – might be your best choice.
Quicken Loans says you can apply online for a refinance in minutes. And if all goes well, you can complete the entire refinance process online without ever having to meet or speak with your loan officer. You will have an assigned loan officer, but you’ll typically communicate with that person online. Quicken Loans does say that you might have to speak to a loan officer by phone on rare occasions.
Quicken Loans is a national lender, too, meaning it has a far reach, originating loans in all 50 states plus the District of Columbia. It also offers loans with various terms, including traditional 15-year or 30-year mortgages. But you can also create what Quicken Loans calls a customizable mortgage with a term ranging from eight to 29 years.
Quicken Loans doesn’t say how much you’ll pay in closing costs, though it does estimate that most borrowers will pay from 3% to 6% of their loan amount. With a refinance, Quicken Loans will usually be able to roll your closing costs into your loan amount so that you won’t have to pay these fees upfront. For example, if you are refinancing to a $250,000 mortgage and your closing costs are $7,500, you’d end up with a total loan of $257,500 that you’d pay back in regular monthly payments with interest.
There are some limits to qualifying for a refinance with Quicken Loans. It says you’ll typically need a FICO credit score of at least 680. As with all lenders, you’ll also need an appraisal to determine the current market value of your home. Quicken also says that your monthly expenses shouldn’t be more than 45% of your monthly earnings.
Visit Quicken Loans
Or read Joywallet's review of Quicken Loans.
Discover Home Loans
Pros & cons
Pros
- No closing costs.
- Home equity loans available up to $300,000.
- Multiple repayment options.
Cons
- Only offers home equity loan or mortgage refinance.
- Fixed-rate loans.
Closing costs: None
Discover Home Loans has a lot going for it, including that this lender doesn’t charge closing costs. But this is only a good option if you don’t need too large of a refinance: Discover Home Loans’ maximum loan amount for refinances is $300,000.
But if you don’t have to refinance more than that? Discover is a good choice. Start with the closing costs. Discover doesn't charge any. According to Discover, you'll be charged nothing in application, appraisal, and origination fees. Discover says you'll be responsible for no costs at all at closing. This can save you thousands of dollars on your refinance. You can choose from terms of 10, 15, 20, or 30 years when you refinance. Discover says you’ll need a FICO credit score of at least 620 to qualify for a refinance.
How long it takes Discover to close your loan will vary, but on its site, Discover estimates that it will take about one to two weeks for you to apply online, have Discover review your application, and upload your documents. It will then take Discover about four weeks to process your information and conduct the underwriting process, determining if you can afford your monthly mortgage payment. Discover says scheduling your closing will take about one to two more weeks.
Visit Discover
Or read Joywallet's review of Discover
PenFed Credit Union
Pros & cons
Pros
- Multiple loan options.
- Available in all states.
- No closing costs.
Cons
- Credit union membership required for home loans.
- Can only see rates after sharing personal information.
Closing costs: None
Looking for that more personal touch when refinancing your mortgage? You might consider working with credit unions, which are often known for more personal service. And one that provides plenty of options for refinances? McLean, Virginia-based PenFed Credit Union.
PenFed offers traditional refinances that let homeowners change their existing loan's interest rate, term, or both; cash-out refinances, in which you refinance for more than what you owe on your current mortgage, receiving the extra dollars in a lump sum payment that you can use however you want. Home equity lines of credit, better known as HELOCs, which are revolving lines of credit secured against your home.
PenFed also offers refinances with no closing costs. The credit union says that it will cover VA funding fees, title fees, recording fees, transfer taxes, appraisal costs, credit report fees, and flood certification costs.
To apply for a PenFed refinance, you must provide copies of one to two months of paystubs and at least one year of W2 forms. If you are self-employed, you'll also need to provide copies of your last two years of tax returns.
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Chase
Pros & cons
Pros
- Complete banking experience.
- Available in all states.
- Chase customers get discounts.
Cons
- Closing costs applicable and vary based on the borrower and loan amount.
- No option to apply fully online.
- Does not offer USDA loans.
Closing costs: Varies
Fewer banks are larger than Chase. And with that size comes options. No matter what loan type you want, Chase can provide it for you.
Chase offers standard 15-year or 30-year, fixed-rate loans. But you can also apply for FHA or VA loans or adjustable-rate loans in which your mortgage interest rate might rise or fall each year. You can customize your loan’s terms, too: Instead of taking out a 15-year or 30-year mortgage, you can opt for shorter-term loans that will reduce the interest you pay during the life of your loan.
Your interest rate will vary depending on your credit, where you live, and the size of your refinance. Chase does charge origination fees. These fees, though, will vary.
Chase states that you’ll typically need a home appraisal when you apply for a refinance. But there might be some circumstances when you can skip this step. You can start the application for a refinance online with Chase, and you can also meet or speak with a loan officer if you have any questions. Chase is a national bank that operates in all 50 states.
Visit Chase
Or read Joywallet's review of Chase Bank.
Use Quicken Loans to Check Top Lender Rates
- Powerful home equity solutions
- Get transparent rates from providers
- TrustPilot Rating 4.6 out of 5
- Connect with lenders for $0
- 100% online experience
How does mortgage refinancing work?
Mortgage refinancing involves replacing your current loan with a new one, typically to secure better terms. Homeowners might refinance to lower their interest rate, reduce monthly payments, or switch from a short-term to a long-term loan (or vice versa). The process involves applying for a new loan, getting your home appraised, and then using the new loan to pay off the old one. You’ll start making payments on the new mortgage, often with more favorable conditions.
Why you should consider a refinance
Not all homeowners should consider refinancing their mortgages. If you have a low-interest rate – in the 3% range, say – you might not want to trade your existing mortgage for one with an interest rate of 6% or 5%. And if you recently bought your home – say one or two years ago – you might not have enough equity to refinance. Most lenders require that you’ve built 20% equity in your home to qualify for a refinance.
But if you want relief from high mortgage payments, you might consider refinancing to a longer-term loan that will leave you with a smaller monthly payment. And if you’re tired of paying tons of interest? Going the opposite route by refinancing from a longer-term loan to a shorter-term one can dramatically reduce the interest you pay each month and over the lifetime of your mortgage.
American Homeowners Could Save Big With The Help Of U.S. Mortgage Experts
If you've owned your home for 3+ years, you may be able to get cash out of your home and slash your monthly bills. It costs $0 to get connected with an expert and check your options. You'll be shocked to see how much you could save.
FAQs
What is the difference between a fixed-rate and an adjustable-rate mortgage (ARM) when refinancing?
A fixed-rate mortgage has a stable interest rate that remains the same for the entire loan term, providing predictability. An ARM has an initial fixed-rate period but then adjusts periodically based on market rates, potentially resulting in lower initial rates but higher uncertainty.
How does my credit score affect mortgage refinancing?
A higher credit score often helps you qualify for better interest rates and terms. Lenders typically offer the best rates to borrowers with excellent credit.
Can I refinance if I have an existing second mortgage or home equity loan?
Yes, you can refinance even if you have a second mortgage or home equity loan. However, the process may be more complex and may require coordination with the lenders of both loans.
Is it possible to refinance if I have bad credit?
It can be more challenging, but some lenders offer options for homeowners with credit issues. Be prepared for stricter terms and higher interest rates in such cases.
Can I refinance more than once?
Yes, you can refinance multiple times, but it's essential to consider the costs, benefits, and your long-term financial goals each time.
Use Quicken Loans to Check Top Lender Rates
- Powerful home equity solutions
- Get transparent rates from providers
- TrustPilot Rating 4.6 out of 5
- Connect with lenders for $0
- 100% online experience
The bottom line
Refinancing a mortgage isn’t free, so make sure that a refinance will meet your financial goals before you apply for one. And if you decide to refinance, check out any of the six lenders above.
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Writer
Dan Rafter is a freelance writer who has more than 20 years experience covering personal finance. He's written for the Chicago Tribune, Washington Post, Bankrate, CreditCards.com, Rocket Mortgage, NortonLifeLock and several others.
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