Founded in 2011, SoFi (Social Finance Inc.) focused on financing student loans during the first few years of its operation. The lender gradually expanded to mortgage products and personal loans in 2014. If you’re exploring a SoFi loan refinance for your current mortgage, our guide will cover all the bases for you.
SoFi loan refinancing comes with amazing features like membership discounts and customized rates, but there are some drawbacks you need to factor in before making a decision. We will discuss the following:
- An outline of SoFi home loan refinancing
- Pros and cons of this option
- Best alternatives
SoFi Refinancing Loans for Mortgage—What To Expect
SoFi offers regular and cash-out refinance loans. You can use a regular rate-and-term refinance to generate a loan with the same outstanding balance as your existing mortgage—that way, you’ll shorten your term or lower your interest rate on the new loan.
You have the option to apply for a cash-out refinance if you’ve built up equity in your home. Your new loan would be for a larger principal sum, allowing you to use the extra cash for repairs, renovation, new investment, or personal expenses.
SoFi currently offers conventional refinance only, i.e., loans not backed by specific government programs. If you’re looking for a VA, USDA, or FHA refinance, SoFi is not for you.
Borrowers have limited options when it comes to SoFi mortgage refinance plans. At the time of writing this article, the lender only offers fixed-rate refinance for the following terms:
|SoFi Refinance Term||Interest Rate||Annual Percentage Rate (APR)|
Note: The table is based on the sample rates displayed on the website for an outstanding mortgage of $325,000 and a loan-to-value (LTV) ratio of 80%, without including taxes and insurance. APRs also change over time to reflect the prime lending rates.
SoFi has no adjustable-rate mortgage (ARM) option for refinancing. Since ARMs have lower interest rates in the first few years, they are preferred by those who want to sell their home in the near future.
Qualification Requirements for a SoFi Refinance Loan
Qualifying for a SoFi refinance is similar to the process for any other traditional mortgage. You must have the following credentials:
- Minimum credit score—620
- Debt-to-income (DTI) ratio—36% or less (exceptions can be made for other compensating factors, such as an exceptional credit score)
- Home equity—20% or more
These credentials will be matched with your income status and submitted paperwork to determine if you qualify for the loan. SoFi currently services loans to:
- U.S. citizens
- Eligible resident aliens
Your eligibility also depends on your resident state. The company currently offers loans to eligible borrowers in 46 U.S. states (including the District of Columbia), keeping residents from New York, Hawaii, Missouri, and New Mexico out of its radar. SoFi has a convenient online mechanism that applicants can use to pre-qualify for a refinance.
SoFi Loan—Refinance Rates and Other Costs for Mortgage
SoFi can offer customized interest rates with a soft credit pull. The officers essentially examine your credit profile and refinance intent to provide an estimate. A soft pull is better than a hard pull because the latter damages your credit score temporarily, which can be a problem if you’re shopping around for other loans.
The soft pull comes with a drawback—you don’t get the option to lock your rate in. You can request SoFi for a 45-day rate lock only after you’ve signed a contract or officially completed a refinance application. Many borrowers find the option inconvenient because it prevents a healthy rate comparison to other lenders. Keep in mind that SoFi will do a hard credit pull during the screening process.
SoFi refinance rates are typically lower than what competitors charge, but their lending charges and closing costs may be high. Your closing cost can be between 2% and 5%, depending on your profile as a borrower, while the administration fee is around $1,500. You can get a $500 discount on processing if you’ve used SoFi for school loans, personal loans, mortgages, or investment products in the past.
Application Process for SoFi Refinance Loans
SoFi has an all-online application process, as the company does not run any physical branches. You don’t have to create an account if you’re only looking to get a personalized rate estimate. All you have to do is:
- Navigate to the SoFi rate check page
- Enter your name, state, and email
- Provide details about you and your property—and you’ll get the estimate rates
If you decide to get a SoFi refinance, you need to create an account and complete a detailed online application process. You usually have to submit several documents electronically, including:
- Tax returns (including 1099s, if applicable)
- Proof of identity
- Pay stubs and W2s (dating back two years)
- Bank statements (you can sync your bank account with SoFi)
- Photo ID
- Divorce alimony or child support documents (if applicable)
- Rental history
- Statement of additional assets
If your application is accepted, SoFi’s Mortgage Loan Officers (MLO) take about 40–60 days to close the refinance. MLOs and customer representatives are also available via phone—you can reach them at (833)-408-7634. The website says that they can connect throughout the day, but a few customers have pointed out that the representatives are only available till 6 p.m. (EST).
Source: May Gauthier
Borrowing Experience—Customer Opinion on SoFi Loan Refinance
SoFi holds a predominantly positive customer opinion due to its easy online application process, although the reviews apply to all products and services offered by the company. If we narrow it down to SoFi’s mortgage servicing, the reviews are quite average.
Borrowers who’ve had a good experience with SoFi home refinancing praise the company’s fully integrated online application process, membership discounts, and easy-to-navigate website interface for payment and tracking. The negative reviews on the product generally revolve around slow processing, occasional resubmission of existing paperwork, and technical issues related to the borrower’s online account. Some borrowers were rejected for a loan even after getting an opinion that they could qualify, which left them confused.
Despite a few bad reviews, SoFi has established itself as a trustworthy lender, having funded over $6 billion in student loans, mortgages, and personal loans.
Here is a summary of the various pros and cons of SoFi mortgage refinancing:
|• Fully online processing|
• Membership discounts
• Typically low interest rates
• Customized rates with soft credit pull
|• No ARM refinance|
• Limited rate-lock convenience
• No physical branches
Worthy Alternatives to a SoFi Refinance
Several lenders compete with SoFi in the traditional lending scenario. Some of the best options for a loan refinance include:
- Rocket Mortgage
- PNC Bank
- Caliber Home Loans
- New American Funding
- Wells Fargo
Most underwhelming reviews about SoFi seem to come from borrowers who have trouble qualifying for conventional loans or want a faster solution. Know that problems like slow processing and documentation hassle are present with every traditional lender because they have to operate within inflexible federal guidelines.
Source: Amy Hirschi
If you’re not satisfied with conventional mortgage options, you can go for no-nonsense asset-based loans for refinancing, mostly offered by professional hard money lenders. These loans are secured by the underlying property (like in the case of typical mortgages) but have lenient qualification requirements and faster processing.
When To Get Hard Money Loans for Refinance
Hard money loans have become an important part of the lending industry because they cater to borrowers who:
- Have been rejected by traditional lenders
- Want to skip rigorous documentation requirements
- Require a fast and efficient processing
- Have complicated real estate situations (like a slow-selling fix-and-flip property)
Hard money lenders operate within the state guidelines but are less bureaucracy-oriented, so they can serve applicants with poor credit or high DTI ratios. In most cases, presenting robust collateral is all you need to qualify for hard money financing, and you can acquire the funds within 2–3 weeks.
Keep in mind that hard money loans have higher interest rates than long-term mortgages because they are offered for a shorter period (1–3 years) and with minimal inconvenience. You can expect rates between 8%–15% for refinance loans, depending on the lending guidelines of your state.
Refinance the Easy Way—Let Hard Money Loan Solutions Handle It!
Whether it’s collecting documents, surviving hard credit pulls, or making constant phone calls to check your application status, traditional loans can be a nightmare. Turn to Hard Money Loan Solutions (HMLS) and enjoy effortless refinancing—apply online to get approved quickly!
HMLS is headquartered in Florida and offers a wide range of mortgage, investment property, and business loans. You can refinance any residential or commercial property with HMLS, including:
- Single/multi-unit homes (self-occupied or rental)
- Secondary or vacation homes
- Retail units
- Partially constructed properties
HMLS lenders are industry veterans who want to make capital accessible to applicants beyond the red tape of banks. You can qualify for a refinance or a cash-out refinance easily, provided you:
- Hold property in a decent market
- Have enough equity in the property
If you’re refinancing, the HMLS team will typically ask for your mortgage documents and basic property details. You don’t have to bother with bulky bank statements, credit reports, and tax returns because they are not a factor in the lender’s decision-making process.
The group also provides emergency refinance assistance to borrowers who are late on the repayment schedule of their existing mortgage or are at risk of foreclosure. You can also go for a hard money bridge, rehab, or construction loan if it fits your partucular funding needs. Get a free consultancy with HMLS experts to figure out what would work best for you.
Source: RODNAE Productions
Benefits of Refinancing With HMLS
HMLS has a 5-star rating on Google and a track record of completely satisfied borrowers. Here are the top five benefits of using the group’s services:
- Lenient eligibility criteria—HMLS loans are open to borrowers with:
- Poor credit
- Non-U.S. status
- High DTIs
- Past financial setbacks (like tax defaults)
- Transparent communication—You will receive prompt communication about whether or not you qualify for a refinance. HMLS lenders also support clients with expert knowledge of business, bridge financing, and real estate investments
- Fast funding—An average HMLS deal is funded within 10 days, although straightforward deals can get refinanced earlier
- Interest-only payments—Most hard money lenders, including HMLS, ask for interest-only payments throughout the loan tenure. You have no insurance commitment. Pay the loan principal at maturity when you sell the property or get a traditional refinance
- Reasonable fees—HMLS’ simple cost structure is explained to borrowers upfront. You won’t be levied with additional charges out of the blue, such as digital retention, underwriting, processing, appraisal, and upfront fees, that other lenders usually charge
HMLS sets up tailor-made loan structures with interest rates and repayment schedules that serve each client’s situation. The table below is a summary of the group’s lending framework:
|Interest rate type||Fixed|
|LTV||Up to 70% of:|
• Current purchase price
• Appraised asset value (the lower of the two will be considered)
|Origination fee||2 points or 2%|
|Closing time||3 days to 2 weeks|
|Down payment||Not required|
You can use the website’s interest-only or cash-out refinance calculators to get fair estimates of your total financial commitment.
HMLS Application Process—A Combination of Online and In-Person Support
Applying for an HMLS loan is done completely online, but you get to talk to lenders directly during processing. Here are the steps involved:
- Fill out an online application for an HMLS loan (your info is 100% confidential)
- Talk to the group’s lender when they call you
- Answer their questions and confirm your interest in the refinance
- Review the loan package offered (the lender usually conducts a property appraisal before making an offer)
- Accept the terms
Once you communicate your acceptance, the legal team at HMLS will promptly prepare your documents and facilitate the funding. The lending process is smooth and efficient, even if your deal is complicated!
At HMLS, clients come first. The team is open to modifying loan plans to accommodate your changing needs. You’re never charged a prepayment penalty if you settle anytime after six months.
Will SoFi Refinance a SoFi Loan?
If you have an existing SoFi loan, the company can refinance it again as long as you meet their basic requirements in terms of credit score, DTI ratio, and financial health. The option works if you’re getting a lower interest rate, but keep in mind that you have to bear the closing costs and administration fees. Do a cost-benefit analysis before choosing any refinancing plan.
Featured image source: Vanessa Garcia