The best online mortgage refinance company is the one that can get you the best terms and rates. When you're shopping around for mortgage rates, utilize a great network of lenders who will compete for your business. There are online mortgage refinance marketplaces such as LendingTree or the bank where you have the most assets.
Using relationship pricing is very help for getting a lower mortgage rate. I've used relationship pricing to lower by mortgage rate by up to 0.5%. However, it required me having $1 million of assets with the banks.
I have met with management of LendingTree in Burlingame, California and they have a vey deep mortgage lending product. They have one of the largest online market places where lenders compete for your business at no cost to you. I have also met with people at their largest competitor before as well. They have an excellent product that is getting deeper with more offerings.
In the past, you'd have to apply for a mortgage one-by-one. It was cumbersome, slow, and very tiring. Now, you can apply for a refinance, a new mortgage, or a HELOC through LendingTree and get multiple lenders to aggressively compete for your business. So much more efficient!
When banks compete, you win.
Best Online Mortgage Refinance Company: LendingTree
After graduating from Bucknell University, Doug Lebda went to work for PricewaterhouseCoopers in Pittsburgh as an auditor and consultant. When he decided to purchase his first home and obtain a mortgage, he found the process of visiting multiple banks and combing through mortgage offers frustrating, time consuming, and exhausting.
Lebda realized that if the process was that difficult for someone with his financial acumen, then there must be a massive market of others with the same desire for a better way. With this idea, Doug founded CreditSource USA in 1996 with Jamey Bennett, whom he knew from Bucknell and had previous experience founding BookWire.
The new company was later rebranded as LendingTree and by 1998, LendingTree launched nationally online with its headquarters based in Charlotte, NC. They also have a large office in Burlingame, just 30 minutes south of San Francisco.
On February 15, 2000, LendingTree went through a successful IPO and is now a ~$641 million market capitalization company as of 2024. LendingTree has the balance sheet, longevity, and trust to be one of the leading lending networks on the web today.
Free Quotes, No Obligation
The great thing about LendingTree is that you can apply for a no obligation loan online in minutes, and within the hour, you'll get competing banks e-mailing and calling you about their best rates. Then you can pit each one against each other to give you the best deal possible!
You, the borrower doesn't pay LendingTree a penny. It's the banks who pay LendingTree to compete for your business. As a result, lenders are motivated to try and get you the best loan possible to win your business.
Be forewarned the celerity of the lenders can be quite surprising to those who are not used to such quick service. Their e-mails and phone calls will die down after several days once they realize you have gone with another lender, or are not interested in their offers.
I like to use LendingTree to get quotes in writing and then bring these quotes to my main bank to get them to match or beat the LendingTree rate. Using this strategy, I was able to get my bank to refinance my jumbo loan to a 2.375% interest rate from their initial 2.5% offer.
Why You Should Refinance Now
Mortgage rates rose between 2021-2023. However, rates are set to come back down again in 2024.
It behooves you to at least check what the latest rates are if you have not refinanced in the past six months. Get as many bids as possible to get the best mortgage rate and terms as possible.
A big part about growing your net worth is doing everything possible to minimize expenses. I believe everybody should at least own their primary residence to get neutral the ever rising property market. Once you own, it's all about lowering your property taxes and getting the best mortgage rate possible.
Mortgage Rates Should Stay Low Forever
Mortgage rates have been going down for over 35+ years as you can tell by the chart. There is obviously a risk that interest rates will rise at some point in the future, but I'm in the camp that interest rates will stay low for years to come.
Just look at Japan after their real estate bubble burst in the late 1980s. Their interest rates have hovered close to zero for 30 years. Sweden, Australia, and 20+ other countries have zero or negative real interest rates at the moment as well.
I see a scenario where interest rates only inch up by about 2% maximum over the next 20 years because there's still a lot of slack in the economy. There's a large underemployed population and median household income has come down over the past decade from $59,000 in 2005 to now only $61,000 in 2019.
The Federal Reserve will only raise the Fed Funds rate marginally. Even so, that doesn't mean mortgage rates will go up because mortgage rates are more tied to the 10-year bond yield which has been declining due to all the risk in the markets.
Low mortgage rates for longer is why I don't think the housing market will collapse any time soon.
Favorite Type Of Mortgage
In a continued low interest rate environment, I prefer taking out a 5/1 ARM amortizing over 30 years. Why pay a higher rate when the average length of homeownership is 7 years and interest rates are in a structural decline? You can certainly go for a 30-year fixed loan if you want absolute piece of mind and believe interest rates will be aggressively higher in the future. But if the 5/1 ARM mortgage rate is at least 1% cheaper, then I would strongly consider an ARM.
Take the monthly interest savings and save or invest it. There's a interest rate hike cap that's fixed for one year after the fixed adjustment of an ARM is done. There's also a lifetime interest rate cap that's usually no more than 4% – 5% higher than the initial rate. You can always refinance your ARM before the fixed period is over like I've done many times before.
But also consider a 15-year fixed mortgage. It's much lower than the average ARM right now due to a mortgage abnormality.
Take Advantage Of Lower Rates
The goal with refinancing is to save money by locking in a new low rate. I've refinanced three different properties over the past 13 years multiple times, and my combined interest savings a month is roughly $4,000. That adds up to well over $1,000,000 in interest savings over the life of the loans!
If you can find a home that's a good deal, you can afford the payments, and plan to stay there for 10+ years, then take advantage of lower interest rates and buy property.
Take a look online with a mortgage rate aggregator for some of the lowest mortgage rates. There are rate quote platforms that have large networks of lenders that compete for your business. Get as many written offers as possible and then use the offers as leverage to get the lowest interest rate possible from them or your existing bank.
Compare multiple real quotes all in one place to save time and money. When banks compete, you win.
Diversify into AI
One of the worries I have is that artificial intelligence will eliminate jobs and make it difficult for my kids to find fulfilling careers. As a result, I am investing in private and public artificial intelligence companies. This way, in 20 years, if AI is really detrimental to the labor market, I'll have a lot more money to take care of my kids.
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About the Author
Sam began investing his own money ever since he opened an online brokerage account in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college working at two of the leading financial service firms in the world. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate.
In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $200,000 a year in passive income. He spends time playing tennis, hanging out with family, consulting for leading fintech companies and writing online to help others achieve financial freedom.
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