The Best FHA Refinance Lenders of 2019
FHA loans can be excellent choices for first-time homebuyers because they’re easier to qualify for than other types of loan programs. Borrowers with credit scores as low as 580 can be approved for a mortgage, making these loans a crucial step toward homeownership for people with less-than-perfect credit and income histories.
This flexibility comes from its backing by the federal government through the Federal Housing Administration. The same advantages are also available when it comes time to refinancing your home.
FHA loan programs can help you accomplish additional financial goals after you’ve bought your home. The FHA streamline program offers refinancing with no income or appraisal requirements, and an FHA cash-out refinance allows you to borrow up to 85% of the equity in your home.
LendingTree reviewed data from hundreds of lenders that offer 30-year fixed rate FHA refinance loans to come up with the top five lenders of 2019. Our ratings are based primarily on the interest rate terms offered to borrowers on LendingTree over the last 12 months. Then, we take into account the quality of information each lender provides on their websites. You can read up on our full methodology below.
| KS StateBank
KS StateBank was founded as Kansas State Bank of Manhattan in 1969. The bank is based in Manhattan, Kan., and has branches in Minnesota, Arizona and Missouri.
KS State Bank offered a median 30-year fixed FHA refinance rate of 4.62% on the LendingTree platform.
The homepage of the bank’s website features general home loan product information under the “Personal” drop-down menu of the website. It also includes a link to a checklist of documents needed for each loan type, a glossary of mortgage terms and mortgage calculators.
There is no “Apply now” button, but there is a “Find a lender and apply today” link that takes the reader to a page where customers can choose a general application to fill out, or a list of loan officers at each of the bank’s branches to contact directly.
| HomeDirect Mortgage
HomeDirect Mortgage is part of BOK Financial, a financial company based in Tulsa, Okla. HomeDirect Mortgage is based in Kansas City and provides mortgage loan products in all 50 states.
HomeDirect Mortgage offered a median 30-year fixed FHA refinance rate of 4.91% on the LendingTree platform.
The homepage provides a number of different informational tabs including loan programs, VA loans, and mortgage calculators. Each drop-down provides additional details about a number of different mortgage qualifying topics.
The “Apply now” button appears by clicking on the “Get prequalified” tab at the top of each webpage, and takes the consumer to a link to fill out an online application.
| NBKC Bank
The NBKC Bank corporate headquarters is located in Overland Park, Kan., and they provide consumer banking services as well as mortgages. The bank offers FHA loans in all 50 states.
NBKC Bank offered a median 30-year fixed FHA refinance rate of 4.87% on the LendingTree platform.
The homepage has a “Home loans” button to access information about NBKC Bank’s loan programs. The consumer can choose from four options including “Get prequalified,” which takes them to another section featuring an “Info center” with additional options to get more detailed information about mortgage and homebuying related topics.
This section also features mortgage calculators, homebuying tips, and other helpful articles. There is no “Apply now” button on the site, but a 1-800 number appears at the top of the pages, and there is an option to have a live chat in the lower left side of the webpages.
| Royal United Mortgage LLC
Royal United Mortgage LLC has been in business since 2008 and is headquartered in Indianapolis. The company currently offers mortgages in Indiana, Illinois, Ohio, Texas and South Carolina.
The Royal United Bank offered a median 30-year fixed FHA refinance rate of 4.77% on the LendingTree platform.
The website has loan product information and an assortment of qualification tools on the homepage, along with a blog for more in-depth articles on different homebuying and mortgage financing topics. Educational videos provide additional information about the basics of refinancing and purchasing.
There is a “Tools + more” sidebar in the “Calculators” page that include loan calculators, rates, an FAQ section, a mortgage glossary, videos and useful tips. There is no “Apply now” button for a complete loan application, although the “Inquire now” button allows a customer to be contacted by Royal United Mortgage.
| BNC National Bank
BNC National Bank was formerly known as BNC National Bank of Minnesota and changed its name to BNC National Bank in 2002. The company was founded in 2001 and is based in Glendale, Ariz.. It offers full-service banking products in addition to home loans.
BNC National Bank offered a 30-year fixed FHA refinance rate of 4.74% on the LendingTree platform.
The homepage does not feature any mortgage product information or educational information. However, the BNC Blog does feature helpful mortgage related articles about homebuying and mortgage-related topics.
The “Your life” link does provide a path to another section titled “Your loans,” where a variety of financial calculators are located, including several different mortgage payment calculators by clicking on an additional “Mortgage” tab.
No “Apply now” button was found on the site, although there was a “Contact us” option with an input screen, and phone numbers and emails to reach BNC National Bank representatives.
How we choose our “best” lenders
Our “best” winners aren’t chosen based on rate alone, but also with a unique rating developed by our editorial staff called “Online Information Quality,” or OIQ. We’ve taken extra time to review the information you can access online, including how efficient it is to access loan product information, to use mortgage tools like mortgage calculators and to fill out a loan application.
To determine the best 30-year fixed FHA refinance lenders, we analyzed data from actual loan terms offered by lenders to borrowers on LendingTree. We chose the top five lenders by rate for the last 12 months. Then we selected for lenders that originate mortgages in at least 25 states. From that list, we gave each lender an OIQ rating based on answers to the following when accessing the lender’s main website. One point was given for each yes answer.
Is there general product information on the website?
If the website features both basic terms of the loan (30-year, 15-year, adjustable rates) and program offerings (FHA, Conventional, FHA, VA), it scores a full point.
Is there general home loan information on the website?
Borrowers can make the most informed decisions if they have additional information regarding mortgages in the form of explanation articles, FAQ sections or links to an informational blog. Sites that have additional mortgage information score an extra OIQ point.
Is the general home loan information easy to find?
If the information is available within two clicks on the homepage, it scores an extra point, since a consumer will be able to get the information easily without having to search extensively through the site.
Are there any education tools (e.g., loan calculators) on the page or at least one click away from the homepage?
Mortgage calculators, home value estimators and other tools help consumers to make educated decisions, so landing pages that feature them score an additional OIQ point.
Is it easy to find the “apply now” button?
Mortgage users in the digital age want a quick online way to apply for a mortgage, so if the “Apply now” button is easy to locate the homepage, it will be easy for a consumer to apply once they’ve gotten the information they need to proceed to the next step in the mortgage process.
Tips for shopping for a 30-year fixed FHA refinance mortgage
The first thing you need to decide when it comes to a 30-year refinance loan is what your financial goal is. If you just want to save money on a lower rate, an FHA streamline refinance can be a good option.
You’ll have to prove you’ve had your current FHA mortgage at least seven months, but as long as you’ve made your payments on time, you won’t need to provide any income documentation and won’t need an appraisal to verify the value of your home.
Your loan officer will have to prove there is a net tangible benefit for you to refinance, which just means you need to be able to save money every month without paying an excessive amount for closing costs.
If you need some cash to pay off credit cards or invest in home improvements, a cash-out FHA refinance will give you the power to borrow up to 85% of the value of your home. This is five percentage points more than a conventional loan allows, giving you access to the equity in your home to pay off debt or make home improvements.
While APR is a good baseline to determine competitive offers, you should also do a breakeven analysis on your refinance. This is a measure of how many months it takes to recoup the fees you’ll pay to complete the refinance.
Calculating a breakeven is easy. First, you’ll want to find out what the closing costs are, focusing on the lender fees such as origination, appraisal and credit report, and the title fees.
Don’t include the ongoing costs of your home like property taxes or insurance.
Once you determine the closing cost figure, divide it by the amount of savings for each loan option to calculate the number of months it will take to recoup your costs. The best option will be the one that takes the least amount of months to recoup.
The information in this article is accurate as of the date of publishing.
The 30-year fixed rate FHA loan is one of the most popular mortgage programs for first-time homebuyers. The Federal Housing Authority program has some of the most flexible guidelines that …