Many people think they’re stuck with the mortgage they have, but that’s not the case. A mortgage refinance can be a great personal finance tool. It can lower your monthly payments, lower your interest rate, and put cash in your pocket for things like paying off high-interest credit card debt or making much-needed home improvements.

A mortgage refinance can save you money but if you’re still traumatized from the nightmarish home buying process, you might be hesitant. Add to that the number of refinancing companies there are to consider, and plenty of people decide that it’s not worth the hassle.

Best Mortgage Refinance Companies

If you’re considering a refinance, here are some of the top companies that make the process quick and easy.

New American Funding

With New American Funding you get a 5 year rate protection pledge, which means if rates drop, you can refinance with no fees (terms apply). Check your rates now right here in under 2 minutes by answering a few questions and find out how much cash you might be able to get.

New American Funding has funded $69 billion in home loans since 2010. There is no minimum credit score to get approved with New American Funding.

No minimum credit score.

New American Funding: NMLS#6606

LendingTree

LendingTree is an online lending marketplace. The company streamlines the shopping process by allowing you to gather and compare rates from multiple mortgage refinance companies in one place.

LendingTree allows you to shop a wide range of financial products, including personal loans, credit cards, and of course, mortgage refinance offers.

The company draws from its network of over 700 lenders to help customers find the best rates. LendingTree has facilitated over 65 million loan requests since 1996.

What is a Mortgage Refinance?

A mortgage refinance is the act of taking out a new loan to pay off your original mortgage. With the original mortgage paid off, borrowers can take advantage of a new mortgage with a lower interest rate or better terms.

Why Refinance Your Mortgage?

People refinance to save money in some way or to get access to cash. Borrowers refinance in order to take advantage of lower interest rates, reduce their monthly payments by increasing their repayment term, or cash out some of the equity they’ve built in their home.

If you didn’t put down 20% when you bought your home, you’re paying PMI, primary mortgage insurance. PMI protects the lender in case you default on the loan. The thought is that if you don’t have at least a 20% stake in your home, it’s easier to make the decision to walk away if you can’t afford to pay your mortgage anymore.

The average annual PMI premium generally ranges from .55% to 2.25% of the original loan amount each year. For a $250,000 home, your PMI can cost between $1,375 and $5,625 per year or $114.58 to $468.75 per month!

If you’ve accumulated enough equity to do so, you can refinance your mortgage and eliminate PMI entirely.

When to Refinance Your Mortgage

If you can qualify for an interest rate at least 1 percentage point lower than your current rate, refinancing can save you a great deal of money over the life of the loan. But it only makes sense to refinance if you plan on staying in your home for several more years. It takes most refinances several months to several years to break even and start saving you money, so if you plan to move in the reasonably near future, it’s not the right time.

How to Refinance Your Mortgage

The process of refinancing your mortgage is not all that different from the process of obtaining a mortgage.

• Shop around for a lender that offers the terms that best suit your needs.
• Apply with at least two lenders so you can compare offers.
• Choose an offer.
• Lock in your interest rate.
• Close the loan.

How to Choose the Right Mortgage Refinance Lender For You

Be sure to shop around. Think of refinancing your home as making a significant purchase — a six-figure purchase, because that’s essentially what you’re doing. If you were buying anything that would cost you a six-figure dollar amount, you would be sure to do your research.

With so many mortgage refinance companies out there, there’s at least one that will meet your needs. That’s why it’s generally not a good idea to refinance with your current mortgage lender. You may not have shopped around for the best mortgage when you bought your home and that may have been several years ago, so it’s a good idea to see what offers might be out there now.

And if you bought your home many years ago, you probably didn’t have the option of an online mortgage. Still, there are plenty of online options for refinancing, and many of them have better rates than do traditional lenders because they don’t have the same overhead costs. Those savings are passed on to you, the borrower.

Look for a lender with the lowest interest rates, as this is where the greatest cost savings come from. Understand any fees involved in your refinance, which vary by lender. There are upfront fees, like closing costs, and ongoing fees, like a late payment fee or an early repayment fee. You don’t want the fees to exceed the amount of money you’re saving with a lower interest rate.

Save Some Money Today

We all love to save money, but often, we are penny-wise and pound-foolish. If you really want to save money, an impactful amount of money, refinancing your mortgage can be a great way to do it.
Whether you refinance to a lower interest rate or do a cash-out refinance to pay off your credit card debt, a mortgage refinance can put a lot of money back in your pocket.