The two best mortgage refinance lenders online are:
1) Credible – Credible is the #1 mortgage refinance mortgage place for 2020 and beyond. San Francisco-based Credible uses sophisticated technology and highly qualified, pre-vetted lending partners to compete for your mortgage refinance business.
2) LendingTree is one of the best mortgage refinance lender due to its longevity, healthy balance sheet, and proven track record. They have one of the largest online market places where lenders compete for your business at no cost to you.
In the past, you'd have to apply for a mortgage one-by-one. It was cumbersome, slow, and very tiring. Now, you can apply for a refinance through Credible or LendingTree and get multiple lenders to aggressively compete for your business. So much more efficient!
I've been writing about the best mortgage refinance lenders since 2009 when Financial Samurai first started. Further, I've used these lenders to help refinance multiple properties since 2005.
Best Mortgage Refinance Lenders
The best mortgage refinance lenders stated years ago. For LendingTree, it started in 2000. Credible, my favorite mortgage refinance lender, was founded in 2012.
Here's the story about LendingTree's founding. After graduating from Bucknell University, Doug Lebda went to work for PricewaterhouseCoopers in Pittsburgh as an auditor and consultant. When he decided to purchase his first home and obtain a mortgage, he found the process of visiting multiple banks and combing through mortgage offers frustrating, time consuming, and exhausting.
Lebda realized that if the process was that difficult for someone with his financial acumen, then there must be a massive market of others with the same desire for a better way. With this idea, Doug founded CreditSource USA in 1996 with Jamey Bennett, whom he knew from Bucknell and had previous experience founding BookWire.
The new company was later rebranded as LendingTree and by 1998, LendingTree launched nationally online with its headquarters based in Charlotte, NC. They also have a large office in Burlingame, just 30 minutes south of San Francisco.
On February 15, 2000, LendingTree went through a successful IPO and is now a ~$1.2 billion market capitalization company as of 2017. LendingTree has the balance sheet, longevity, and trust to be one of the leading lending networks on the web today.
Free Quotes, No Obligation
The great thing about the best mortgage refinance lenders is that you can apply for a no obligation loan online in minutes. Within the hour, you'll get competing banks e-mailing and calling you about their best rates. Then you can pit each one against each other to give you the best deal possible!
You, the borrower doesn't pay LendingTree or Credible a penny. It's the banks who pay LendingTree and Credible to compete for your business. As a result, lenders are motivated to try and get you the best loan possible to win your business.
Be forewarned the celerity of the lenders can be quite surprising to those who are not used to such quick service. Their e-mails and phone calls will die down after several days once they realize you have gone with another lender, or are not interested in their offers.
I like to use Credible and LendingTree to get quotes in writing and then bring these quotes to my main bank to get them to match or beat the LendingTree rate. Using this strategy, I was able to get my bank to refinance my jumbo loan to a 2.375% interest rate from their initial 2.5% offer.
Why You Should Refinance Now
It behooves you to at least check what the latest rates are if you have not refinanced in the past six months. If you are a new homebuyer or want to refinance, it's important to get as many bids as possible to get the best mortgage rate and terms as possible.
30-year fixed mortgage rates have dropped to just under 3% on average. Meanwhile, you can get a 7/1 ARM at 2.75% or less. Although the mortgage market is still very tight, loans are going through for the highest credit score borrowers.
Mortgage interest rates are close to ALL-TIME LOWS due to all the coronavirus pandemic fears! It's worth taking advantage and refinancing now.
A big part about growing your net worth is doing everything possible to minimize expenses. I believe everybody should at least own their primary residence to get neutral the ever rising property market. Once you own, it's all about lowering your property taxes and getting the best mortgage rate possible.
My Take On Future Interest Rates
Mortgage rates have been going down for over 40+ years as you can tell by the chart. There is obviously a risk that interest rates will rise at some point in the future, but I'm in the camp that interest rates will stay low for years to come.
Just look at Japan after their real estate bubble burst in the late 1980s. Their interest rates have hovered close to zero for 30 years. Sweden, Australia, and 20+ other countries have zero or negative real interest rates at the moment as well.
The Federal Reserve will only raise the Fed Funds rate marginally if there is a bull market. Even so, that doesn't mean mortgage rates will go up because mortgage rates are more tied to the 10-year bond yield which has been declining due to all the risk in the markets. Low mortgage rates for longer is one of the key reasons why the housing market will stay strong for years to come.
Best Type Of Mortgage To Get In A Low Interest Rate Environment
In a continued low interest rate environment, I prefer taking out a 5/1 ARM amortizing over 30 years. Why pay a higher rate when the average length of homeownership is 7 years and interest rates are in a structural decline?
You can certainly go for a 30-year fixed loan if you want absolute peace of mind and believe interest rates will be aggressively higher in the future. But if the 5/1 ARM mortgage rate is at least 1% cheaper, then I would strongly consider an ARM.
7/1 ARMs are also good in 2021+ because the yield curve is at its lowest point around that duration. I'm getting a new purchase mortgage in 2020 and locked in 2.5% for a 7/1 ARM without relationship pricing, and 2.125% with relationship pricing to buy more real estate.
Take the monthly interest savings and save or invest it. That's what best mortgage refinance lenders can help you do to build wealth.
There's a interest rate hike cap that's fixed for one year after the fixed adjustment of an ARM is done. There's also a lifetime interest rate cap that's usually no more than 4% – 5% higher than the initial rate. You can always refinance your ARM before the fixed period is over like I've done many times before.
It's a good idea to compare multiple mortgage offers to minimize your cost. Credible is one of the best mortgage comparison marketplaces to find the best mortgage rates.
Take Advantage Of Lower Rates
The goal is to save money by locking in a new low rate now before they go even higher. I've refinanced three different properties over the past 13 years multiple times, and my combined interest savings a month is roughly $4,000. That adds up to well over $1,000,000 in interest savings over the life of the loans!
If you can find a home that's a good deal, you can afford the payments, and plan to stay there for 10+ years, then I would take advantage of record low interest rates today.
Check out the two best mortgage refinance lenders today for free:
About the Author: Sam began investing his own money ever since he opened an online brokerage account in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college working at two of the leading financial service firms in the world. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate. H
About Financial Samurai: FinancialSamurai.com was started in 2009 and is one of the most trusted personal finance sites today with over 1 million organic pageviews a month. Financial Samurai has been featured in top publications such as the LA Times, The Chicago Tribune, Bloomberg and The Wall Street Journal.