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Refinancing your mortgage could be the best financial decision you’ll ever make.  But in order for the refinance to be beneficial, a lot of homework needs to be done to secure the best refinance rate possible.  Let’s first discuss some of the reasons you may want to refinance your mortgage, then show you where to go, in order to lock in the best mortgage rates available.

Steps To Refinance Your Mortgage

Before discussing a refinance with your lender, or even looking into mortgage rates, you need to consider whether or not a refinance is the right choice.  A refinance effectively takes whatever you currently owe on a mortgage and morphs it into new terms with a new rate and payment amount.

Step #1 – Determine If You Need to Refinance – For most people the determining factor is the interest rate. If you can lower your rate by 1% or more, refinancing is often a smart move. Even if you can lower your rate by 0.50% a refi can still be a good idea if you plan to live in the house for the foreseeable future.

A second reason to refinance is to convert a variable rate loan to a fixed rate loan. Particularly with mortgage rates so low, locking in a 15 or 30 year fixed rate can be a wise decision, even if the interest rate doesn’t change significantly.

Step #2 – Improve your Credit as Quickly as Possible – Once the decision is made to refinance your mortgage it’s crucial to do so with the best credit score possible.  The interest rate you receive is dependent on a couple of factors, most notably how good your credit is.  Improving your credit in a short time span is difficult but every point counts.  Consider making large payments on credit cards, especially if you’re close to your credit limit because near limit credit cards can hurt your credit score.  Also make sure to avoid applying for any kind of new credit other than the refinance, as a high amount of inquiries also lowers a credit score.

Related: If you don’t know your score or want to improve it, you can get your official FICO score here.

Step #3 – Find the Right Lender to Refinance Your Mortgage – A mortgage refinance is an important decision, certainly one that should not be made quickly.  Your first move should be to check with your current lender to see what they can do in terms of a new rate and terms.  Lenders frequently offer a discount to current mortgage customers. Your search, however, should not end there.  Make a stop at other banks in your area to see if they can beat your current lenders rate.  Remember to also check online, as some online institutions can offer the best mortgage rates.

Finding the Best Refinance Mortgage Rates Online

With hundreds of different websites and companies offering to process your mortgage refinance, finding the right one can be tricky.  I’ve listed several sites below that everyone should always check before refinancing, as these lenders always seem to be on top in terms of consumer satisfaction.

LendingTree – This is the place to start. After you fill out a simple form, LendingTree’s online system goes out and finds multiple options. This makes it easy to compare both the best rates and the lowest fees. It’s definitely the place to start.

Quicken Loans – Rated number one by JD Power and Associates for “Highest in Customer Satisfaction for Primary Mortgage Origination,” Quicken Loans may fool you with a software type name but this lender has always been one of the brightest and best. Currently Quicken Loans is the #1 online mortgage lender and #5 retail mortgage lender in the country and considering they’ve been in this business more than 25 years, Quicken Loans is a perfect place to start your search for the best refinance mortgage rates.

CapWest Mortgage – Earlier this month, we decided to take a look at CapWest Mortgage and found them to be a very solid mortgage lender.  CapWest is a subsidy of Farmers Bank and Trust and looking at their current mortgage rates, it’s easy to see why they’ve been around more than 100 years.  Whether your looking for a 30-year, 15-year, ARM or any other type of mortgage, be sure to check out the rates CapWest are offering.

Wells Fargo – Wells Fargo is well known for a lot of things, including offering competitive mortgage rates in many variations.  A few years ago, Wells Fargo made headlines by swooping in and buying Wachovia Bank, even though Citi was in talks to do just that.  That merger seems to have worked out for everyone as Wells Fargo has soared in the last 24 months.  Every month, we update our post on Wells Fargo mortgage rates to keep consumers aware of just how low these guys are willing to finance your mortgage.

Author Bio

Total Articles: 1081
Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Article comments

Jason Shora says:

I would stay away from variable interest rate mortgage loans because they may go up on you. I Worked for a well known 8 th largest lender in the U.S. during part of the mortgage refinance boom around 2002 and 2003 and they started to focused on selling variable interest rate mortgage loans around 2003 or 2004 which seemed more affordable at first with some cash out, it looked good to the customer in the short term. Our company did alot of business and I saw a few years later how the interest rates went up and some people just could not pay their increased house payments. This is a big part of what happend back around 2003′ 04 and 05 which I believe led partly to the way things are now and how things went in 2007 and 2008. The company I worked for processed about 500 to 900 loans per day. Stay away from variable interest rate mortgage loans.
Learn more. and good luck. ; )

Westly Smith says:

Thanks for the tips on how to refinance your mortgage. My wife and I were talking about how to do this just last week. Right now, we’re working on improving our credit score, so that we can receive the best interest rate possible, like you mention.