Best Mortgage Refinance Companies of November 2022 – Compare Refinance Rates

What Are Current Mortgage Rates?

The average 30-year fixed mortgage rate rose from 3.5% at the start of 2022 to 7.21% this week. Mortgage interest rates are twice as high as they were at the beginning of the year, and higher borrowing costs are having a tangible impact on housing affordability and consumer sentiment.

• 30-year fixed: 7.21% (down from 7.27% a week ago).
• 20-year fixed: 7.29% with 1.4 points (down from 7.38% a week ago).
• 15-year fixed: 6.46% (down from 6.49% a week ago).
• 10-year fixed: 6.56% (down from 6.72% a week ago).
• 5/1 ARM: 5.51% (up from 5.48% a week ago).
• 7/1 ARM: 5.61% (equivalent to 5.61% a week ago).
• 10/1 ARM: 5.72 (up from 5.67% a week ago).
• 30-year FHA loans: 6.48% (down from 6.6% a week ago).
• 30-year jumbo loans: 7.22% (down from 7.29% a week ago).
• VA purchase loans: 6.45% (down from 6.56% a week ago).

• Rate-and-term refinance. This is the most common type of mortgage refinancing. You’ll take the balance of your original mortgage and borrow at a different rate and terms. You should get a lower interest rate, and you can switch from an adjustable-rate loan to a fixed-rate loan, or vice versa. For example, you could refinance a 30-year adjustable-rate mortgage to a 15-year fixed-rate loan.
• Cash-out refinance. This can offer a change of interest rate and other terms, but you’ll increase your remaining mortgage balance. It gives you cash at closing, which is added to your outstanding mortgage debt. For a cash-out refinance, keep in mind that you must have enough equity built up in your home to take cash out against it.
• Cash-in refinance. This is less common than rate-and-term refinance or cash-out refinance. You’ll bring cash to the closing table to pay down your loan balance with this type of mortgage refinance. It’s an interest-saving option if you’ve got the cash to do it because this type of loan can offer a lower mortgage rate, shorter repayment term or both.
• Streamline refinance. Qualified homeowners with a mortgage through the Federal Housing Administration, Department of Veterans Affairs or Department of Agriculture may be eligible for more affordable terms if they refinance through these government programs. Exact qualification requirements vary between the FHA, VA and USDA, but streamlined options usually involve less paperwork and may not require another appraisal.
• No-closing-cost refinance. With this refinancing option, borrowers don’t have to pay closing costs when taking out a new loan. Instead, the borrower is charged a higher interest rate, which allows the lender to apply the premium toward closing costs. Essentially, the borrower forgoes closing costs but will pay more interest over the life of the loan.

• Interest savings. A lower mortgage refinance rate will reduce your monthly mortgage payment, as long as you do not borrow more money or shorten your loan term. In fact, a new loan with a lower rate might help you build equity in your home faster than you would with a higher interest rate. Shorter loan terms, such as switching from a 30-year to a 15-year fixed-rate mortgage, can also offer interest savings and allow you to pay off your mortgage sooner, although this may result in higher monthly payments.
• Longer terms and lower monthly payments. Longer loan terms, such as a 30-year fixed-rate mortgage, will lower your monthly payment. Usually, a mortgage with a longer term will have a lower monthly payment than a mortgage with a shorter term. But the longer you take to pay off your loan, the more interest you will pay overall.
• Switching from an adjustable rate to a fixed rate. Converting from an adjustable-rate to a fixed-rate loan locks in your interest rate, preferably at a lower rate. You may want to do this if mortgage refinance rates are low and you plan to stay in your home for more than a few years.
• Switching from a fixed rate to an adjustable rate. Some homeowners who plan to move within a few years choose to switch from fixed-rate to adjustable-rate mortgages. Compared with a fixed-rate mortgage, an ARM could provide a lower rate for the first few years. That means big interest savings if you won’t live in your house for long.
• Converting home equity into cash. Cash-out refinancing converts your home equity into cash that you can use to pay for home improvements or to pay off debts, such as a second mortgage or a high-interest credit card balance. But exercise caution with your home equity; avoid using it to finance short-term expenses for what could amount to long-term debt.

• You could save money now and over time. One of the primary goals of refinancing is to lock in a lower mortgage rate. By doing so, you’ll typically be able to reduce your monthly mortgage payments and save money on interest charges over the life of the loan.
• You may pay off your mortgage faster. You may choose to shorten your repayment term, such as refinancing a 30-year mortgage into a 15-year mortgage. This helps you get out of debt faster and save a substantial amount of money over time.
• You can lock in a fixed interest rate. Refinancing from an adjustable-rate mortgage to a fixed-rate mortgage lessens the risk that your interest rate – and monthly payments – will rise substantially at the end of your fixed period.
• You can access your home’s equity. A cash-out refinance allows you to tap into your home’s equity, which you can use to meet other financial goals, like renovating your house or paying off higher-interest debt.
• You may be eligible to eliminate PMI. Once you’ve hit a loan-to-value ratio of 80% or less, you may consider refinancing to get rid of private mortgage insurance.

• You’ll have to pay closing costs. Your potential interest rate savings may be offset by closing costs when you refinance your mortgage. Calculate your potential interest savings, so you can determine whether refinancing is worthwhile.
• You may pay more over time. If you refinance from one 30-year mortgage into a new one, you’re essentially restarting the clock on your mortgage debt. This makes your home loan more expensive to repay, even if you’re able to lower your monthly payments.
• You’re taking on more debt. In the case of a cash-out mortgage refinance, you’re adding to your total debt balance in order to tap into your home’s equity. This will lead to higher overall loan costs.
• You may be charged a prepayment penalty. Some mortgage lenders charge prepayment penalties to borrowers who repay their loan before the term ends. Read your original loan disclosure to see if your lender charges this fee.

• 15-year fixed-rate mortgage refinance.
• 30-year fixed-rate mortgage refinance.
• FHA refinance.
• VA loan refinance.
• USDA loan refinance.
• Adjustable-rate mortgage refinance.
• Jumbo loan refinance.

1. Gather information. Lenders need details about your original mortgage – like the interest rate and the balance on your current loan. Much of this information is on your mortgage statement. You should also check your credit score and find ways to improve it, if necessary.
2. Get preapproved. Mortgage preapproval allows you to see the actual loan amount and interest rate you can expect if you apply. A preapproval is not a commitment to lend, and you should shop around to find which lender is right for you. Limit your comparison shopping to a 45-day window to reduce the negative impact to your credit score.
3. Apply. Once you determine which refinance loan is best for you, fill out the application. You’ll need to include documentation such as proof of home insurance, your most recent pay stubs, and a driver’s license or other form of identification.
4. Field follow-up questions from the lender. The lender may have other questions for you after reviewing your application, such as asking you to explain an employment gap.
5. Get your home appraised. Often, the lender will work with you to set up an appointment for an appraiser to determine the value of your home. A home appraisal is usually an upfront cost for you, which can be rolled into your closing costs. If your appraisal is satisfactory, you can schedule closing.
6. Sign documents at closing. You should receive your closing disclosure prior to actually closing, and you should compare this with the loan estimate you received at the outset of the refinancing process. Just like when you initially bought your home, closing involves signing multiple documents.
7. Get set up with your new lender. Your escrow company and your former mortgage company will be paid after you close on your new loan. As you’re between mortgage companies, you may have some time between closing and when your first payment on your new loan is due.

• You’ve had your mortgage for a long time. If you’ve had your loan for a long time – generally, at least 10 years for a 30-year loan – you reach a point where you’ve paid most of the interest and are building equity. When you refinance a loan, you restart the loan amortization process and revert to paying more interest than principal. However, you could potentially refinance to a shorter-term loan to avoid this drawback.
• Your current mortgage has a significant prepayment penalty. Some lenders charge a prepayment penalty for paying off your loan early, even to refinance. If you refinance with your current mortgage company, you can request that this fee be waived.
• The fees outweigh the savings. If you want a lower interest rate to save money over time, you’ll only achieve your goal if you own the property long enough for the lower monthly payments to offset closing costs. Find your break-even point – when your savings are equal to the costs of your new loan – by dividing your total closing costs by your monthly savings.
• You plan to sell your home in the next few years. If you sell your home before you break even on the cost of a refinance, you could waste money by refinancing the loan.

• Mortgage recasting. A mortgage recast is when you put a large lump-sum payment toward your mortgage principal, which allows your lender to update your monthly payment. You’ll keep the same interest rate and repayment term, and you’ll pay a small recasting fee instead of closing costs. This may present a cheaper option than refinancing, especially if you have a low mortgage rate already.
• Loan modification. You may be able to extend your repayment term, reduce your interest rate or switch from an ARM to a fixed-rate loan through your current lender without going through the refinancing process. Not all mortgage lenders offer loan modification, so check with your lender to find out what’s available to you.
• Home equity loan or line of credit. If you’re looking to tap into your home’s equity with a cash-out refinance, you should also consider alternatives like a HELOC or home equity loan. Also known as a second mortgage, this type of loan allows you to borrow against your home’s equity in addition to your original mortgage. If you currently have a low mortgage rate, a second mortgage may make more sense than refinancing.