Are you having trouble managing your mortgage, credit card debt or student loan payments? It might be time to consider a refinance. If you’re a California resident who wants to learn more about the benefits of refinancing, be sure to read more about our picks for the best refinance mortgage companies in the Golden State.
Best Mortgage Lenders to Refinance in California
Thinking about pursuing a refinance in California? Here are some of our favorite refinance companies.
- Online Mortgages
1. Rocket Mortgage®: Best for Easy Refinancing
If you had a tough time getting a mortgage loan, you might be dreading going through the process to refinance a mortgage. Rocket Mortgage® can be one of the best places to refinance a mortgage if you’re looking for a simple application process. You can apply for your new loan in as little as 30 minutes from your phone. In most cases, you’ll receive an instant decision on your new loan — no need to wait by the phone for weeks on end for a representative to call.
Rocket Mortgage® offers refinancing for almost every type of loan. From jumbo loan refinancing to VA refinancing, Rocket Mortgage® can service almost every type of loan.
- Specialized Loan Products
2. Flagstar: Best for Unique Financial Situations
If you’re self-employed or you’ve just graduated from a professional school (like law school or medical school), you might have trouble finding a refinance. Refinance companies typically look at your income and debt in isolation from the bigger picture of your career trajectory, which can be hard on business owners or recent college graduates.
Flagstar specializes in more personalized refinances. The company’s team of “financial craftsmen” will take a closer look at your financial situation as a whole instead of just looking at the numbers. Flagstar can be the best mortgage company for you if you have a unique financial situation that requires a more nuanced look.
In addition to refinances, Flagstar also offers a wide range of personalized conventional, jumbo and FHA loans. It also offers other types of financial products, ranging from savings accounts to personal loans.
- Traditional Lending
3. Wells Fargo: Best for In-Person Service
Online mortgage companies can be a convenient way to adjust your loan with a refinance. However, if you’re less technologically proficient, you might want the comfort of working with a traditional bank.
As a resident of California, you can quickly get a refinance in person through Wells Fargo. Wells Fargo is the largest bank in California with almost 1,000 branches across the Golden State. You can begin your application online and finish it at one of Wells Fargo’s branches as well if you prefer. Wells Fargo also offers 24/7 customer service. No matter when you have an issue, Wells Fargo can be there.
In addition to refinancing services, Wells Fargo also offers banking services and services both conventional loans and government-backed mortgage loans.
Current California Refinance Rates
Interest rates change on a daily (and sometimes hourly) basis. If you’re looking to refinance to a lower rate, you should keep track of interest rates and how they’re changing in your area. Let’s take a look at a few of the average APRs currently being offered on 30-year conventional refinances by a few of California’s top mortgage lenders.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.943% | 7.594% |
| 15-year fixed | 6.048% | 6.562% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | 7.8% | 8.458% |
When Should You Refinance in California?
Deciding when to refinance can be just as important as the company you choose to work with. How can you decide if you should refinance now or wait? Let’s take a look at a few of the factors that you should consider before you begin the refinance process.
Your Home Equity
Equity refers to the percentage of your home that you actually own. For example, if you borrow $200,000 to buy a home and you pay $20,000 off your principal balance, you have 10% equity in your home.
Most refinance lenders won’t allow you to refinance more than 80-90% of your loan value. This means that in most circumstances, you’ll need to already have at least 10% equity in your home before you qualify to get a refinance. Your lender might require you to have even more equity if you want to take a cash-out refinance, a special type of refinance that allows you to withdraw a percentage of your home’s equity in cash.
If you’ve been paying on your loan for more than a few years and you had some form of a down payment when you took out your mortgage loan, you probably have a sizable amount of equity in your home. Double-check with your current lender before you apply for a refinance. Contact your mortgage company and request a mortgage statement. Your statement will tell you what percentage of your principal balance you’ve paid off. If you have less than 10% equity in your home, you’ll have a harder time finding a mortgage company willing to service your refinance.
Current Interest Rates
Refinancing to a lower interest rate is an excellent way to save money on your home loan. Refinancing to a rate that’s even a fraction of a percent lower can leave you with thousands of extra dollars in the bank by the time you own your home.
Let’s take a look at an example. Let’s say you currently have a mortgage loan with a principal balance of $200,000, 20 years left on its term and an APR of 4%. A lender offers to refinance your loan to the same term but with an interest rate of 3.6%. If you take the refinance, you’ll pay your lender $80,853.49 in interest by the time you make your last loan payment.
If you don’t take the refinance, you’ll pay your current lender $90,870.57 by the time your loan matures. Refinancing with the exact same term saves you about $10,000. You’ll also pay about $40 less every month, which can be especially helpful if you’re living on a tight budget.
Interest rates change throughout the year. Begin by requesting a mortgage statement from your lender so you know your current APR. Check in with rates every few months. Most mortgage companies allow you to view current rates after entering just a little information on your loan and your financial situation.
When you shop for a refinance, you’ll notice 2 rates listed side-by-side: interest rate and APR. An interest rate is the base rate of interest you’ll pay to your lender, while your APR is your interest rate plus the fees associated with your new loan. Remember to always compare APRs — not interest rates — when you shop for a loan because the APR is the rate that you actually pay.
Refinance Your Home Loan Your Way
Are you ready to begin your refinance? The key to successfully and affordably adjusting your home loan to fit your needs is doing plenty of research. Don’t be afraid to schedule meetings or phone calls with representatives from multiple refinancing companies — you don’t need to work with the first mortgage company you speak to or even your current lender. Avoid committing to a refinance until you find the company, interest rate and loan option that’s right for you and your family.
About Sarah Horvath
Sarah Horvath is a distinguished financial writer renowned for her expertise in mortgage content. With years of experience in the mortgage industry, Sarah offers invaluable insights into home financing, refinancing, and real estate trends. Her comprehensive understanding of mortgage products, coupled with her ability to simplify complex financial concepts, makes her a trusted resource for homebuyers and homeowners alike. Sarah’s dedication to providing accurate and actionable information empowers readers to navigate the mortgage process with confidence. Whether discussing mortgage rates, loan types, or tips for homeownership, Sarah’s writing is characterized by clarity, reliability, and a commitment to helping individuals achieve their homeownership goals.