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Wednesday, June 23rd
"Social Finance" is where the lender known as SoFi gets its name. The company started out as a way of encouraging people to work together to make smart financial decisions, allowing investors and borrowers to reach their goals simultaneously. You'll find traditional products here, like personal loans and mortgages, but the structure has more of a credit union feel: clients are described as "members", for example. Rest assured, however, that SoFi still has plenty of oversight and regulation, and they've been around for nearly a decade.
Most States Covered
Before you start the process of applying for your mortgage refinancing, it's important to point out that SoFi does not originate or refinance mortgages for properties in the following states: Alaska, Hawaii, Missouri, New Hampshire, New Mexico, New York, South Dakota or West Virginia. Additionally, their mortgages are only available for properties that will either be a primary residence or a second home that will be occupied for at least 12 months: no investment properties are eligible for a refi here.
Create An Account To See The Rates
For your refinanced mortgage, all of your options with SoFi are fixed-rate, with terms ranging from 10-30 years. In order to even get a hint of what your rates and fees would be, you'll have to create a SoFi account. You'll be asked for personal details like birthdate and citizenship, as well as your estimated gross annual income.
Enter Your Information
Next, once you've selected "refinance" or "cash out refinance" as the reason for your application, SoFi needs more details about the property. You'll need the original purchase date, the estimated property value, current mortgage balance, the amount of any HOA dues, and your estimated credit score range.
Great Informative Charts
After we provided our SSN (with a soft pull on our credit score), we got a great chart showing us all of the possibilities for our mortgage refinancing: terms varied from 1-30 years, and we had four options in each term for points vs. interest rates. We really like how SoFi's chart also displays the break-even point for each option, as well as the total interest paid over the term of the new mortgage.
However, at that point, the application process came to a grinding halt: our dashboard said that we had to reach out to a specific broker to complete the application. We also weren't able to go back in and look at our rate options again, leaving us with the feeling that we were locked into whatever we had seen previously. We also weren't given any kind of Loan Estimate, leaving us in the dark about closing costs, fees, and so forth. That definitely puts SoFi behind most of the competition, if we have to submit to a "hard pull" on our credit in order to see those kinds of details.
SoFi's reputation has some room for improvement. They have an "A" rating but no accreditation with the Better Business Bureau. On the BBB's listing for SoFi, there's an alert describing alleged misrepresentation of savings on home mortgage and student loan refinancing, which isn't very reassuring. There were also more than 150 complaints registered there. All of them seemed to have a reasonable response from SoFi, but when there are ample refi providers with far fewer negative comments, it makes it harder for this company to outrank them.
Room To Improve
At the end of the day, SoFi gives you a digital refi platform without many of the conveniences you'll get with a higher-rated lender. We'd like to see more transparency with closing fees and easier access to rates without having to create an account first. Sofi isn't our last choice for mortgage refinancing, but there are definitely other options that are more likely to inspire confidence in the process.
While it might be tempting to go with a local mortgage broker or even your community bank, you're not likely to get the lowest rates or ideal terms that way. Why? They usually work with their preferred partners instead of negotiating or "comparison shopping" to get you the best deal. You're paying for convenience and familiarity, but that's it. Fortunately, there are many reputable online lenders that make it quick and easy to get low rates and great terms, all from your laptop or even your mobile phone!
With interest rates at historic lows, it's worth your while to consider mortgage refinancing. Whether you want to shave years off your current mortgage and lower your interest rate or get cash out from your established equity, there's no better time than now. Using an online lender lets you compare rates, complete the application, and finish the entire process without ever leaving home: some services send a mobile notary to you for the final steps of signing the paperwork! Otherwise, you can often choose a local title company if you prefer to go the more traditional route.
Not all online mortgage refinancing providers work the same. While some operate more like a regular bank, funding your loan themselves, others act as a referral service so that you can compare rates and offers from multiple lenders at once. Whichever site you choose, don't be afraid to take the quote you receive and ask other lenders to compete for your business! Some of the fees charged in the refi process are negotiable, so why not see who can give you the absolute best loan terms?
As you start the process of refinancing your mortgage, keep in mind the following criteria for each lender or service you're considering:
TopConsumerReviews.com has reviewed and ranked the best services for mortgage refinancing available today. We hope this information saves you money by helping you find the best rates and terms when you refinance your mortgage!
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