Our Picks of the Best Mortgage Lenders for Refinancing

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Refinancing your mortgage can be a real hassle. It takes a lot of paperwork, there are usually closing costs, and then there’s all the research. You have to figure out the right rate and term, and -- most importantly -- find the right lender who’s going to give you the best possible deal.

We can’t solve the paperwork or closing costs for you (sorry!), but we’ve done the research to identify who we believe to be the best mortgage refinance lenders. We’ve also compiled the main tips you’ll need to sail through the process -- what to expect in refi fees, how to make yourself as attractive to lenders as possible, and the documentation and paperwork you’ll need to get started.

Should you refinance your mortgage?

Refinancing your mortgage is a great way to access your home equity or change the financial circumstances around your mortgage, so 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 ten 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. Interest rates are still near historic lows, so a refi can be had for a pretty low rate (we’ll get to the best rates a little further down). 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 -- the delta between a 4% rate and a 4.2% rate on a 30-year mortgage for $250,000 is $8,353 in interest.
  • Convert an adjustable-rate mortgage (or ARM) to a fixed-rate mortgage. ARMs are interest-rate sensitive, so with interest rates increasing, they may start to get pretty expensive. 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 still further.
  • 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 doing a refi not just because you can, but because you need it to achieve your financial goals for your house.

What documents do you need in order to refinance?

The documentation you need for a refi is usually pretty similar to the documentation you needed for the original mortgage process. It may feel a little invasive to share all of this information with someone you don’t know well, but banks want to make sure they have everything locked down so they’re lending prudently.

The lender will ask you for:

  • Identification. Usually this means your name, birthdate, Social Security number, and address(es) you’ve lived at over the last few years. This often includes a copy of your license and Social Security card.
  • Proof of income. The fact that you’ve successfully paid your mortgage for some period of time isn’t enough -- the lender also wants to assess your ability to pay in the future. The last couple months’ of paystubs (or your P&L statement, if you’re self-employed), plus copies of your federal tax returns over the last couple of years, is pretty standard.
  • Other assets. If you had to lend money to one of two people with the same income, and one of them has a million bucks in a 401(k), that would change your calculus, right? Lenders want to know how much you have in IRAs, 401(k)s, brokerage accounts, CDs, and checking and savings accounts. You’ll likely need the most recent quarterly or monthly statement for each account.
  • Debt statements. The lender wants the whole financial picture, so you’ll need to provide statements documenting any other debts you’re paying off. (No, the $50 you owe Stan for winning Fantasy Football last year doesn’t count.) Think student loans, car loans, and the like.
  • Credit history. The lender will initiate what’s called a “hard pull” of your credit report to ensure that you’ve paid other debts on time and to see what credit score Experian, Transunion, and Equifax have awarded you. The lender will also probably ask for some kind of explanation if you have any marks against you in your credit history (think judgments, collections, and the like). The mortgage company may also ask for your payment history for insurance and utilities (including internet and phone).
  • Home insurance information. The lender will want to ensure the house is properly insured, so you can expect to provide them with at least your lender’s name and phone number and your home insurance policy number.

Of course, the list above isn’t entirely exhaustive -- different lenders may ask for different things, after all, and your personal circumstances may make different documentation necessary -- but gathering this information and documentation beforehand will save you a ton of time during the scramble to pick the right lender.