Mortgage rates rose sharply in 2022, ending the pandemic-era refinancing boom. But refinancing still can make sense for homeowners who want to pull out cash to renovate their homes. Bankrate has made it easier for you to compare refinance offers by reviewing dozens of mortgage lenders in several key areas. Based on those benchmarks, here is our guide to the best mortgage refinance lenders in 2023.

U.S. Bank

U.S. Bank mortgage review

Availability All 50 states
Loans offered Conventional, jumbo, FHA, VA, USDA, fixed-rate, adjustable-rate; rate-and-term, cash-out and streamline refinancing; home equity line of credit (HELOC), home equity loan; construction and renovation loans; investment property; interest-only
Credit requirements 620 for conventional loans; 740 for jumbo loans
Down payment minimum Varies by loan type
Where to find Online, in person or by phone

Navy Federal Credit Union

Navy Federal Credit Union mortgage review

Availability All 50 states
Loans offered Conventional, jumbo, VA, Military Choice, Homebuyers Choice, fixed-rate, adjustable-rate, rate-and-term, cash-out and streamline refinancing; home equity line of credit (HELOC), home equity loan; investment property
Credit requirements Varies by loan type
Down payment minimum Varies by loan type
Where to find Online or in person

NBKC Bank

NBKC Bank mortgage review

Availability All U.S. states
Loans offered Conventional, jumbo, FHA, VA, fixed-rate, adjustable-rate; rate-and-term, cash-out and streamline refinancing; home equity line of credit (HELOC), home equity loan; construction and renovation loans
Credit requirements 620 for conventional loans; 680 for jumbo loans; 620 for FHA loans; 620 for VA loans
Down payment minimum Varies by loan type
Where to find Online. NBKC has just a few physical branches.

SoFi

SoFi mortgage review

Availability Available in all states except Hawaii (no refinances in New York)
Loans offered Conventional, jumbo, fixed-rate, adjustable-rate; rate-and-term and cash-out refinancing; home equity loan; investment property
Credit requirements 620 for conventional loans
Down payment minimum Varies by loan type
Where to find Online or by app only

Valley National Bank

Valley National Bank mortgage review

Availability Available in all states
Loans offered Conventional, jumbo, FHA, VA, USDA, fixed-rate, adjustable-rate; rate-and-term and cash-out refinancing; home equity line of credit (HELOC), home staging line of credit; construction and renovation loans
Credit requirements Varies by loan type
Down payment minimum Varies by loan type
Where to find Online or at branches in four states

What types of mortgage refinancing are there?

In general, there are two main types of mortgage refinancing:

  1. Rate-and-term refinancing, which involves replacing your current mortgage with a new loan that comes with a different interest rate, a different loan term or both
  2. Cash-out refinancing, which enables you to tap the equity in your home (in the form of a lump sum given at closing) in addition to lowering your rate

When is the best time to refinance your mortgage?

It can be a good time to consider refinancing your mortgage when interest rates drop below the level they were when you got your current loan — ideally one-half to three-quarters of a percentage point lower.

It can also be smart to refinance if your credit has improved and you can now qualify for a new loan with a lower interest rate.

Because refinancing involves closing costs, you also have to consider your breakeven point: the time when you can expect to recoup these costs based on how much you’ll be saving on your monthly payment. If you don’t plan to stay in your home long enough to break even, refinancing might not be the best route if your goal is to save money.

Ultimately, the right time to refinance your mortgage is when it makes the most financial sense for you. This will depend on several factors, including:

Why should you refinance your mortgage?

There are many good reasons to consider refinancing your mortgage, including the ability to:

  • Capitalize on a lower interest rate, which can decrease your monthly mortgage payments and result in less interest paid over the life of your loan
  • Shorten your loan’s term so that you can pay it off sooner, and pay less interest overall, or lengthen your loan’s term in order to lower your monthly payments
  • Replace an adjustable-rate mortgage with a fixed-rate mortgage
  • Cash out your home’s equity to fund home improvements, consolidate debt, finance an education or pay any other expense
  • Remove mortgage insurance if your home’s value has increased

What are the requirements to refinance your mortgage?

There are a few requirements to qualify for a mortgage refinance.

  • Credit score – In order to refinance, you’ll need to meet credit score requirements just as you did with your first mortgage. The exceptions are FHA streamline refinancing and VA streamline refinancing (IRRRL), which don’t call for a credit check.
  • Debt-to-income (DTI) ratio – Some lenders look for a debt-to-income (DTI) ratio of 50 percent or less, and many prefer no more than 36 percent. The DTI ratio is your total monthly debt obligations divided by your gross monthly income.
  • Equity – You should have a sufficient amount of equity in your home in order to refinance. Most lenders prefer you to have at least 20 percent.
  • Seasoning – For most lenders, you’ll need to meet a “seasoning” requirement, as well, which is a period of time you need to wait before you can refinance. This is usually a minimum of six months since you last refinanced or purchased your home.

Should you refinance with your current lender?

You are not required to refinance your mortgage with your current lender, and it’s smart to shop around for offers. However, there can be advantages to sticking with your current lender. First, your lender might be willing to match or beat a lower rate quoted by another lender. Second, it’s often easier to refinance because the lender already has a lot of your financial information. Third, your lender might lower or waive certain refinance fees to keep you as a customer.

How to refinance your mortgage

There are several steps involved in refinancing your mortgage. Here is an overview of what to expect:

  1. Determine your goals. What will refinancing help you achieve? Knowing how much home equity you’ve accumulated is important so you can better define your goals.
  2. Do the math. Calculate your break even point for closing costs, and consider whether you’ll be in your home long enough to recoup them. Now is a good time to also decide whether you’ll pay closing costs upfront or add them to the new loan.
  3. Check your credit report and work to improve your score or correct errors, if needed.
  4. Shop around and get refinance rate quotes from several lenders.
  5. Apply. When you find the best deal, it’s time to complete an application. Be sure to have all of your financial information prepared and be ready to provide it when you apply and throughout the underwriting process.
  6. Prepare for a home appraisal — your lender will likely require one.
  7. Gather the funds you’ll need to cover closing costs if you plan to pay them on closing day.

Methodology

To determine the best mortgage refinance lenders, Bankrate evaluated lenders based on several criteria, including cost (competitive refinance rates and low or no fees), loan processing times, scope of refinance offerings, borrower incentives and customer satisfaction.