With interest rates near record lows, millions of Americans could potentially save thousands or even tens of thousands of dollars by refinancing their mortgages. And it could be easier to do than you think. In fact, you might not even have to leave your house or pick up a phone to complete the entire refinancing process! Some of our favorite mortgage lenders have streamlined the process, and you might be able to refinance your mortgage entirely online.
With that in mind, we've done the research to identify the best mortgage refinance lenders. Our shortlist of best mortgage refinance companies includes top picks that offer an array of valuable perks, including some with the best refinancing rates, no origination fees, low closing costs, and fast closing.
Best for: Online-only application
Rating image, 4.5 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
Has the right combination of features and perks, including no origination fees, low mortgage rates, and an online experience that helps homeowners cut their costs while saving time. Case in point, borrowers can secure preapproval in minutes. The lender also offers $150 off closing costs when applying through The Ascent site.
Min. Credit Score
- 620
Min. Down Payment
- 3%
Key Features
- No origination fees
- Instant loan estimates
- 100% online application
- $150 off closing costs for The Ascent readers
- Better Cash offer
Loan Types
- Conventional
- FHA
- Jumbo
Fixed Rate Terms
- 30y, 20y, 15y
Adjustable Rate Terms
- 10/6, 7/6, 5/6
Best for: No lender fees and jumbo loans
Rating image, 5.0 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
No lender fees for existing customers, along with a fully online experience make it a top pick. One of the rare lenders to offer jumbo loans up to $30 million.
BEST OF 2022
Best for: Streamlined online process
Rating image, 5.0 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
Led the transition to online-only applications, and that seamless process is one reason why it has become the largest U.S. lender. Consistent No. 1 J.D. Power customer service rankings and its high-quality app make it hard to ignore.
BEST OF 2022
Best for: Digital experience & down-payment assistance
Guaranteed Rate Mortgage
Rating image, 4.0 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
Guaranteed Rate does a great job with ease of usability, offering comprehensive loan information during your research phase, plus the option to securely upload and digitally sign loan documents when you're ready to apply.
Best for: Jumbo loans
SoFi Mortgage
Rating image, 4.0 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
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.
Min. Credit Score
- N/A: Uses alternative data
Min. Down Payment
- 5%
Key Features
- Member discount
- Fast prequalification
- Fast financing
Loan Types
- Conventional
Fixed Rate Terms
- 30y, 20y, 15y, 10y
Adjustable Rate Terms
- None
Best for: Diverse loan offerings and relationship discounts
Bank of America Mortgage
Rating image, 5.0 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
Few lenders can match the lineup of loan products and terms, and the bank is a great solution for first-time homebuyers. The high-tech digital experience compliments the bank's extensive branch network. The interest rate and fee discounts for Preferred Rewards members define what relationship banking should look like.
Best for: Refinance specialist
loanDepot
Rating image, 4.5 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
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.
What is a mortgage refinance?
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 refinance your existing loan balance with one of our best refinance lenders. 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.
Why should I refinance with one of the best mortgage lenders?
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:
- Reduce your monthly mortgage payment. If you're 10 years into a 30-year mortgage, you can refinance the remaining amount to spread those 20 years of payments across 30 years, lowering your monthly payment. This may also allow you to…
- Lock in a lower interest rate. Mortgage interest rates are still near historic lows, so a refinance, or refi, can be had for a pretty low rate. If you've had a mortgage for a while and have made your payments on time, a new lender may be willing to offer you a lower rate than what you're currently paying -- potentially saving you thousands of dollars. Even a small change can make a big difference. For example, you'll pay $12,240 more with a 3.25% rate than a 3% one on a $250,000 30-year mortgage from one of the top refinance lenders.
- Convert an adjustable-rate mortgage (or ARM) to a fixed-rate mortgage. Adjustable-rate mortgages are interest-rate sensitive, so they can start to get pretty expensive as interest rates increase. A refi is a great opportunity to lock in a fixed-rate mortgage for the remainder of your home loan, and now is a great time to get that done before the Federal Reserve increases rates. For more on refinancing from an ARM to a fixed-rate mortgage, check out our guide.
- Tap home equity to pay for a large project (like an addition or a remodel). While a refi isn't the only way to get funds for a home improvement project, it means you aren't paying service on extra debt (unlike, say, with a home equity line of credit or a second mortgage) -- instead, you're just converting some of your equity to cash. This is known as a cash-out refi.
Make sure you're refinancing with one of the best refinancing lenders not just because you can, but because you need it to achieve your financial goals.
What are the risks of refinancing?
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.
What is a good refinance rate?
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 with the best refinance companies, your goal should be to get an interest rate that is in line with or better than the current market average for people with a similar credit score.
How much could you save by refinancing?
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Should you refinance?
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.
One common misconception is that refinancing is free or that it costs the same with every lender. And this isn't the case at all -- borrowers should expect closing costs in the thousands when refinancing. To be sure, this can still be well worth it if you're planning to stay in your home long enough so that the savings outweigh the cost.
Here's an 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.
To determine if refinancing is the right decision for you, check out our guide on whether or not refinancing is worth it.
| Lender | Rating | Best For |
|---|---|---|
|
Rating image, 4.5 out of 5 stars.
|
Best For: Online-only application | |
|
Rating image, 5.0 out of 5 stars.
|
Best For: No lender fees and jumbo loans | |
|
BEST OF 2022
|
Rating image, 5.0 out of 5 stars.
|
Best For: Streamlined online process |
|
BEST OF 2022
|
Rating image, 4.0 out of 5 stars.
|
Best For: Digital experience & down-payment assistance |
|
Rating image, 4.0 out of 5 stars.
|
Best For: Jumbo loans | |
|
Rating image, 5.0 out of 5 stars.
|
Best For: Diverse loan offerings and relationship discounts | |
|
Rating image, 4.5 out of 5 stars.
|
Best For: Refinance specialist |
FAQs
-
A mortgage refinance is the process of obtaining a new home loan for the purpose of replacing an existing loan.
-
- To reduce your monthly mortgage payment
- Lock in a lower interest rate
- Convert an adjustable-rate mortgage (or ARM) to a fixed-rate mortgage
- Tap home equity to pay for a large project (like an addition or a remodel)
- To get rid of mortgage insurance if your home has increased in value
-
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.
Ask the experts
Scott Deacle
Associate Professor of Business and Economics and Department Chair at Ursinus College
When should someone consider refinancing their mortgage?
You should consider refinancing when you can obtain an interest rate that is substantially lower than the one you are paying. You want to refinance if you expect to save more from lower interest payments than the fees you pay for the refinancing. This requires you to estimate how long you will stay in your home. If you plan to move soon, then you won't be paying lower interest for long, so you won't offset the refinancing fees. But if you plan to stay in your house for a long time, then you will save more in interest over time than you pay for the refinancing. There are free refinance calculators on the web that can help you figure out how long it will take to offset the refinancing fee.
A second reason to refinance is if your income has increased and you can afford a larger payment. If so, you might benefit from refinancing from a longer-term mortgage (say, 30 years) to a shorter-term mortgage (say, 10 years). With the shorter-term mortgage, you have higher payments, but the interest that you pay over the life of the loan will be much lower.
A third reason is that your credit-worthiness has improved. This can happen if your credit score improves, your income dramatically increases, or your home increases substantially in value. You can lower your rate substantially and get better terms in these scenarios.
How often should someone refinance their mortgage?
It depends on interest rates. There's usually no reason to refinance when interest rates are rising. But if they are falling, as they generally have since 2007, it might make sense to refinance every three or four years, depending on the size of your loan and its time to maturity. You need to check the calculators to see how much you can save and then determine if you will remain in your home long enough to offset the refinancing fees.
A pitfall that is easy to overlook is that you can unwittingly end up paying far more interest if you continually refinance mortgages, even though you've lowered monthly payments. Consider someone who refinances his or her mortgage every three years and gets a new 30-year mortgage each time. After the third refinancing, that person has much lower payments. But that person also has 30 years left on the mortgage and could end up taking 39 years to be free of debt on their house. The extra nine years of payments mean nine more years of interest. At some point, the borrower should pay more than the minimum monthly payments -- to speed the retirement of the debt and reduce total interest payments -- or refinance into a short-term mortgage.
What are some tips for people wondering how to refinance their mortgage?
It's very easy to apply for a refinance. Many lenders have easy web-based refinancing sites. You should certainly obtain multiple quotes. Check out the big national lenders, but also check out local lenders and the bank or credit union at which you have a checking account. They may give you a better deal if you are an existing customer. Make use of calculators to help you compare rates and to study the impact of "points" on your overall costs.
Before applying to refinance, take advantage of your guaranteed-by-law free credit report to make sure your credit history is accurate. Your credit score plays an important role in determining your interest rate.
In addition, mortgage lenders often encourage refinancing customers to borrow to pay their refinancing fee. Be careful. This adds to your overall debt burden and increases the interest you will pay over the life of the loan. Ideally, you will pay the refinance fee from your savings so you don't increase the principal on your mortgage.
Michael Manahan
Lecturer at California State University Dominguez Hills, Author and Consultant
When should someone consider refinancing their mortgage?
The simple answer is whenever the savings in interest rates reasonably offset the closing costs of a new mortgage. However, there are other reasons to refinance even if you cannot get a better interest rate. If you have a variable rate on your mortgage, your mortgage payment may go up if interest rates rise. Refinancing with a fixed-rate mortgage will eliminate this risk. If you have paid off some of your mortgage, refinancing should reduce your monthly payment and leave more cash for vacations or living expenses. This option is a good option for someone whose income is not expected to increase (people living on some sort of fixed income). Finally, if you have equity in your home, you could refinance and take out cash for home improvements or investments, such as buying a rental property.
How often should someone refinance their mortgage?
You should refinance your mortgage when rates fall below the rate you are paying, but what if rates keep falling? Should you keep refinancing? That is not an easy question to answer because when you refinance you may get a better interest rate, but refinancing costs money. There are appraisal fees, closing costs, title fees, escrow fees, and sometimes points. All these charges can add up to thousands of dollars. Also, when you refinance there is a good chance your credit score will drop, as "new credit" and "credit inquiries" are two things that negatively affect your credit score. If you need credit for anything else, such as a car loan, bathroom or kitchen remodel, or anything else that is paid with consumer credit, you may find you will be charged a higher rate of interest on those loans. Also, when you do refinance the underwriter wants to see your previous loan "seasoned" which means you have made the payments on time for a certain period. Depending on the underwriter, that could be anywhere from six to 12 months. If you apply to refinance too soon, you may not get as good of an interest rate as you hoped.
What are some tips for people wondering how to refinance their mortgage?
I have refinanced properties with dozens of lenders and mortgage brokers over the years. I'd love to tell you there is some secret to make applying for and getting a mortgage easier. If there is, I haven't found it. But to the degree you can make it a little easier, there are some things you can do. First, have your paperwork ready. The lender is going to want tax returns, pay stubs, bank statements, 401(k) account statements, mortgage statements, brokerage account statements, and possibly more. Download electronic copies of all these documents so when asked, you can quickly upload them or email them to the lender. Second, check your credit report. The lender will want you to explain any negative aspect of your credit report and any credit inquiry that has been made recently. Third, when choosing to use a lender or mortgage broker, don't be fooled by all the low interest rate ads. The interest rate you are going to pay is based on the underwriter's assessment of your risk. I have an excellent credit score, excellent credit history, low amount of debt, good income, and reasonably high net worth. Yet I've never been able to get those rates they advertise. Finally, think about your style. Are you okay doing everything online and talking to whoever in the call center answers the phone or do you want a specific person handling your transaction whom you can reach out to with questions or to help you through the process?
Clifford Rossi
Executive-in-Residence and Professor of the Practice at the Robert H. Smith School of Business at the University of Maryland
When should someone consider refinancing their mortgage?
You should keep an eye on the level and possible direction of interest rates over time and compare that with the rate on your existing mortgage to see if there's a benefit from refinancing. Technically, when prevailing rates fall below your existing mortgage rate you may have an opportunity to effectively swap out your old mortgage with a new one at a lower rate. We call that a rate-and-term refinance. But you need to be mindful of the overall cost of refinancing to ensure you are truly getting an all-in lower rate. Specifically, pay attention to how many points and fees you are being asked to pay upfront if any, as that can reduce the benefit you'll get from just the lower rate.
You may also find that in some cases refinancing for a home renovation project might be a good idea if you have experienced a significant increase in the equity stake of your home which many homeowners have seen in the recent run up in home prices. We call this a cash-out refinance. That is, you can replace your existing home mortgage with a new one and actually take cash out of the property for improvements and the like. But these cash-out refinances can be risky so make sure to understand what the impact on your new mortgage payment and payment terms are before taking out such a refinance option.
Lastly, these days there's a better than ever chance that interest rates will rise than fall going forward so borrowers that currently have very low adjustable-rate mortgages (ARMs) may want to consider switching out at some point into a fixed-rate loan if they believe they will be in the home for some time in order to lock in a relatively low mortgage rate now as a hedge against potential future rate increases.
How often should someone refinance their mortgage?
It really depends on things like market conditions. For example, many years ago, mortgage rates were in a period of steady decline such that I had friends going through multiple refinances in a single year as many lenders were offering no-closing-cost refinances which meant that the borrower did not incur any costs for the new loan. Even when rates fell by as little as 25 basis points (0.25%) under those circumstances borrowers were incentivized to refinance. With more lenders offering electronic loan applications, the process to apply for a loan refinance has become more efficient, thus providing borrowers with potentially greater opportunities to act when rate conditions are favorable. Overall, there are no rules on how often one can refinance and certainly as long as the borrower continues to pay the mortgage as agreed it should not detrimentally affect their credit profile for a standard rate-and-term refinance.
What are some tips for people wondering how to refinance their mortgage?
The internet has substantially changed things for the better for borrowers compared to years ago. Now you can go to any of several websites that provide current mortgage rates, including Freddie Mac's Primary Mortgage Market Survey (PMMS), to get a sense of where mortgage rates for various products are. Once you determine whether current rates are lower than the rate you have now, then shop around with several lenders to see what you can get in terms of both rate and fees they will charge. Pay particular attention to those fees and points and make sure you get in writing exactly what the new loan terms and costs will be. Lenders must provide that to you.
Brian Adams
Associate Dean of Graduate Programs, Pamplin School of Business at the University of Portland
When should someone consider refinancing their mortgage?
Refinancing makes sense when the reduction in monthly mortgage payment (due to lower interest rates) is greater than the cost of refinancing the loan. The important variable here is the length of time you expect to remain in the home. Usually you would need to stay in the home for at least another three to five years for the reduction in loan payments to offset the refi fees.
Refinancing may also make sense if the homeowner can use the accrued equity in the house to reinvest in the house for maintenance and upgrades. Usually kitchen and bathroom remodels will add value to the home for the current homeowners when they sell.
How often should someone refinance their mortgage?
How often someone should refinance is up to them. If rates continue to decline and/or the homeowner can use the equity in the home to improve the value of the property, then there may be multiple opportunities to refinance.
What are some tips for people wondering how to refinance a mortgage?
When you are looking to refinance remember to negotiate fees as well as rate.
Chester S. Spatt
Professor of finance at Carnegie Mellon University's Tepper School of Business
When should someone consider refinancing their mortgage?
Refinancing is a forward-looking decision -- people should consider whether there would be sufficient potential savings in interest rates (enough of a drop in interest rates) over the remaining term of the existing loan, for example. The issue is whether interest rates have fallen sufficiently such that it is worth incurring the out-of-pocket costs and the reduction in the value of the prepayment option on the new loan compared to the old one.
How often should someone refinance their mortgage?
It is not a question of the frequency of refinancing, but whether interest rates have fallen sufficiently such that it is worth incurring the out-of-pocket costs and the reduction in the value of the prepayment option on the new loan.
What are some tips for people wondering how to refinance their mortgage?
The type of mortgage that makes sense going forward would depend upon how long the individual anticipated remaining in the property. Whether it makes sense to refinance depends upon the extent to which interest rates have declined.
Moshe Bellows
Managing Member of Maccabee Ventures, adjunct professor of Strategy and Entrepreneurship in the Sy Syms School of Business at Yeshiva University
Note: For the answers below, Moshe enlisted the assistance of his colleague, Barry Stolze, Vice President of Residential Lending at Blueleaf Lending and Who's Who in Chicagoland Real Estate 2020.
When should someone consider refinancing their mortgage?
There is definitely not a 'one size fits all' answer. In the aftermath of the 2008 meltdown came a lot of government regulation and guidance. Some of it actually made sense. Specifically, that a refinance should have some kind of 'tangible benefit.' Some examples include: lower rate, lower payment, ARM to fixed, and cash-out / debt consolidation. Let's take these one at a time;
- Lower rate. In the current market, a 0-point fixed-rate mortgage is available for less than 3.0%. If someone has a rate of 3.375% or higher, they should probably explore the benefits of refinancing. A lot depends on the loan balance. Someone with a $75,000 loan balance may not see much of a savings even from a 1/2 point rate drop while someone with a $750,000 loan would see savings even with less than a 1/2 point rate drop. One should also consider a shorter term if they can manage the payments. A 15-year conforming, 15-year fixed ($548,250 or less in most markets. $822,375 in some high-cost markets) is generally a 1/2 point less than a 30-year fixed. While the payment will be substantially higher, the interest saved with the shorter term may amount to tens of thousands of dollars.
- Lower payment. A couple may have taken on a 15-year fixed pre-COVID, and then suffered a job loss. In this instance, it may make sense to refinance into a longer-term loan, such as a 30-year fixed, even if the rate is the same because the payment will be substantially lower.
- ARM to fixed. Many people took an adjustable-rate mortgage (ARM) to save on their monthly payment, when fixed rates were higher just a couple of years ago. The risk with an ARM is that after the initial term the rate can increase as high as (usually) 5 points over the start rate. So that 3.0% ARM could end up at 8% at some point. If it looks like more than a couple of years before moving on to the next home or the forever home, it's a great time right now to lock in a fixed rate.
- Cash out / debt consolidation. This is where the expression 'cheap money' comes in. Especially now, when real estate values in many markets have soared. If someone has a mortgage balance of $250,000 for e.g., but has a home improvement project for $75,000 on the horizon, they may want to explore a $325,000 refinance. Or, if someone has a mortgage balance of $250,000 and has high-interest credit card debt of $50,000, they may want to explore a $300,000 refinance.
How often should someone refinance their mortgage?
This is a function of cost and benefit. The costs vary from market to market, primarily due to market-specific title charges and taxes. For e.g., a $480,000 refinance in the Chicago market may have all-in title and recording charges of $625, no tax. Total costs (depending on whether or not an appraisal is required) of $2,000-$2,500. While a $480,000 refinance in the Miami market may have all-in title, recording, and taxes of $6,400-$6,900. Total costs around $7,700.
Most lenders have the ability to offer a credit at closing to offset closing costs. Typically, every 1/8 in rate over the 0-point rate yields a large closing cost credit.
So, in the case of the Chicago refinance, if someone stands to save $100 a month at the rate of 2.875%, with closing costs of $2,000. $2000 / $100 = 20 months is the time it would take to recoup the costs. As long as this person knows they'll be in the home two or more years, it makes sense to refinance. Even if they just refinanced six months ago.
In the case of the Miami refinance, if someone stands to save $100 a month at the rate of 2.875%, with closing costs of $6,400. $6,400 / $100 = 64 months is the time it would take to recoup the costs. So this person may want to look into a closing cost credit at 3.125 – 3.25% to reduce the time to recoup the costs.
How often should someone refinance? This really can't be tied to a timeline. Almost all mortgage loans are without a prepayment penalty. So, if rates are falling, re-evaluate if it looks like you can save a 1/4 or more in interest rate. I have clients who have refinanced three times in the last 18 months. If someone just refinanced into a 30-year fixed, a new 30-year fixed is probably the way to go. But if someone is 7+ years into a 30-year fixed for e.g., they may want to look at a 20-year fixed, which may offer slightly better pricing than the 30-year fixed.
What are some tips for people wondering how to refinance their mortgage?
Work with a loan originator you had a positive experience with in the past. Work with a loan originator a friend, relative, or co-worker had a good experience with. There are all kinds of lenders out there; from the one-person mortgage brokerage working out of their basement to the online mega companies with huge advertising budgets, and everything in between. One of these players may offer what sounds like a better rate, but if they can't get your loan closed what does the rate matter?
If you're going to comparison shop, you have to compare lenders on the same day. Mortgage rates, fees, and credits move up and down daily and sometimes intra-daily. So to speak to lender A on a Monday and lender B on a Tuesday, would be an exercise in futility. Many advise comparing APRs. There's a better basis of comparison than comparing APRs. Very simple; rate, costs (including all hard costs; lender-related, title-related, recording, and mortgage tax if applicable like in FL or NY), and lender credit.
- Lender A may offer 2.875% with $2,000 in costs and 0 lender credit, and have an APR of 2.897%
- Lender B may offer 2.875% with $2,000 in costs and a $500 lender credit, but have an APR of 2.91%
Lender B has the better deal even if the APR is higher. Why? Because not every lender's software calculates APR the same way. So unless you're comparing APRs between two lenders at the same company, in my opinion it's a faulty barometer.
After closing -- be sure to receive a copy package. Especially the title policy, closing disclosure, mortgage, and note. All of these documents may be necessary down the road. For starters, your CPA will ask you for your closing disclosure from the closing.
About the Author
Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
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