Rates based on a loan amount of $250,000 and a property value of $425,000.
Are mortgage interest rates lower today than when you got your mortgage? If so, you can save thousands of dollars by refinancing your loan at a lower interest rate. Let’s take a look at what you could expect to pay in interest if you refinance today. You can also take a look at Benzinga’s top picks for some of the best mortgage refinancing companies.
Best Refinance Mortgage Companies Based on Rates
Now that you understand how refinancing generally works, let’s take a look at some of the companies that offer some of the lowest mortgage rates. We’ll help you find the best mortgage company for you by comparing online processes, APRs and more.
Best for a Variety of Options: New American Financing
Best for Self-Employed Borrowers: CrossCountry Mortgage
securely through the CrossCountry Mortgage website
Available in: CA, CO, CT, DC, FL, GA, IL, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA, WA
Best for a Variety of Options: New American Financing
Best for Online Mortgages: Rocket Mortgage®
Rocket Mortgage® is taking steps to make it possible to apply for refinancing.
Rocket Mortgage® makes applying for a loan refinance easy with its simple mobile apps and comprehensive refinance calculator. Its online education center can answer almost any question you have about refinancing, from what to expect about your closing costs to whether it’s a good time to refinance.
Rocket Mortgage® offers almost every type of loan you could need. His team also handles FHA, USDA, jumbo and VA loans. Rocket Mortgage®’s interest rate may be a little higher than other lenders, but it could be worth the extra cost if you’re looking for the simplest mortgage solution possible.
securely via the PennyMac website
Consider PennyMac if you need your loan paid off quickly. PennyMac has offered some of the fastest closings in refinance loans: You can close your refinance in as little as 10 days when you take out your loan through PennyMac. This can be especially beneficial if you’re doing a cash-out refinance and your debt is accruing interest daily.
PennyMac offers refinancing options for almost all loan types, including VA loans, FHA loans, conventional mortgages, USDA loans, jumbo loans and even investment properties.
Mortgage refinancing rate
Reviewing additional mortgage refinancing rates will help you make a wise choice, ensuring you know how much you’ll get out of your loan before you sign on the dotted line.
*APR as of 03/10/23. For the most recent price, click here.
Eligibility for refinancing
There is no legal limit to the number of times you can refinance your home loan. However, this doesn’t necessarily mean you’ll be able to easily find a new mortgage when you need one.
Most lenders will not allow you to refinance 100% of your original mortgage. You must have a certain amount of equity in your home before you can qualify for refinancing. Most lenders will only allow you to refinance between 80% and 90% of the original value of your loan. This means that you will typically have to make payments on your home loan for at least a few years until you qualify to refinance. You may be considering a cash-out refinance, one in which you take on a larger mortgage balance and take the difference in cash. You may need an even higher percentage of equity to do this.
You will still need to meet your lender’s standards before you can take out a new loan. This means you will need to check your credit score and debts before applying. Applying for refinancing is similar to applying for a mortgage loan. When you submit your application, your lender will usually ask for your last two:
- Bank statements
- Most recent pay slips
If you are self-employed, your lender may also ask to see more documents. This could be your full tax return or a profit and loss statement for your business.
Keep in mind that refinances also require you to pay closing costs. Closing costs for a refinance are generally less expensive than closing costs for a mortgage. Expect to pay between 2% and 3% of your loan value in closing costs.
Benefits of Refinancing Your Mortgage
Refinancing your mortgage can help you change your financial situation, completely modify the loan, add borrowers, and more. Remember, though, that your situation is unique and you shouldn’t refinance casually just because your neighbor decided to do so. You need to look at the benefits you have and whether they are worth it for you right now.
Generally, refinancing your mortgage allows you to:
- Reduce your monthly mortgage payments
- Reduce your interest rate
- Change loan duration
- Withdraw money as part of refinanced capital
- Change lender
- Add approved borrowers to the loan (or remove borrowers who may be deceased)
Taking advantage of a mortgage refinance loan is only useful if you’re in the right situation, which you can learn more about below.
Disadvantages of Mortgage Refinancing
Although the average consumer might assume that refinancing your mortgage is always a good idea, there are a few things you need to consider that could backfire when considering refinancing your home loan. This doesn’t mean you should automatically avoid the refinancing process, but it does mean you should consider your overall financial situation, including your mortgage payment, other obligations, income, etc.
Common disadvantages of refinancing a home loan include:
- Mortgage interest rates may not be ideal at the time you want to refinance
- You May Not Be Able to Refinance Your Home’s Current Value
- Changing the terms of your loan can make the mortgage unaffordable
- Taking out money during a mortgage refinance can make it more difficult to repay the loan.
- It may become more difficult to sell the house if you cash out
- Closing costs for refinancing can be prohibitive
Refinance the right way
Calculating refinancing interest rates is not an exact science. We cannot guarantee the refinance rate you will pay, as APRs depend on a number of individual factors. Your loan balance, current equity, credit profile, and location all play an important role in the refinancing rates you’ll see.
The best way to get up-to-date refinancing information is to request a quote. Contact your current mortgage lender and ask for details of your current equity and remaining equity balance. Next, request a quote from a few competing mortgage providers. Getting an interest rate quote is simple and only takes a few minutes. Plus, it can save you thousands of dollars on your refinance.
Frequently asked questions
First, you need to fill out an application and submit it to your lender of choice. To apply, you need 2 prior years of tax returns including your W-2s, your pay stub from last month, 2 months of bank statements and the lender will run your credit report. Once the application is submitted and processed, it takes between 2 and 7 days to be approved or denied. Discover our best lenders and block your rate Today!
The interest you will pay is based on the interest rate you received when the loan was originated, the amount you borrowed, and the term of the loan. If you borrow $208,800 at 3.62%, you’ll pay $133,793.14 in interest over the course of a 30-year loan, assuming you make the monthly payment of $951.65. For a purchase mortgage rate, get a quote here. If you’re looking to refinance, you can get started quickly here.
Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It’s wise to save at least 20%, because the more money you put down, the lower your monthly payment will be, and ultimately, you’ll also save on interest charges. In case you are unable to save 20%, there are several homeownership programs and assistance available, especially for first-time buyers. Check specialist lenders making the home buying experience a breeze.