Should You Refinance With The Same Lender?


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There are numerous financial institutions to choose from when refinancing a mortgage. However, if you were happy with the place where your loan was originally funded, you may be wondering if you should refinance with the same lender.

Before making the decision, you need to understand your own goals and shop around to find the right fit.

Here are some things to keep in mind when looking to refinance with the same mortgage lender:

Can You Refinance With The Same Lender?

Yes, you can refinance your mortgage with the same bank or lender. According to a Black Knight report, 28% of all homeowners who refinanced in the first quarter of 2021 stayed with their current mortgage company.

This could be a good option if your lender:

  • Offers low interest rates or closing costs
  • Gives discounts to returning customers
  • Closes refinancing loans quickly and efficiently

Before going this route there are some things you need to find out:

  • Who is your loan service provider? Your mortgage lender is the institution that funded your home loan, but they may not be the same company that are now processing your payments and managing your account. Since your loan service provider may not be providing loans, be sure that you are speaking with the right company.
  • Do you have to wait a while? Some lenders allow borrowers to wait at least six months before refinancing a home loan. So, if you recently got your mortgage and want to refinance with the same lender, you need to ask if you can.
  • Does Your Original Lender Offer What You Need? There are many different types of refinancing loans such as: B. Interest and term refinancing and cash-out refinancing. Some lenders also offer programs like the FHA Streamline and VA Streamline Refinancing. Make sure your original lender can meet your refinancing goals.

Advantages of Refinancing with the Same Lender

There are two great benefits to refinancing your mortgage with the same lender: saving money and convenience.

You could save some money

As with your original mortgage, there are costs associated with refinancing a home loan. That closing cost is typically between 2% and 5% of the total loan amount – or around $ 5,000 on average, according to Freddie Mac.

However, your lender can waive or reduce certain fees if they already have an appraisal, title information, and mortgage insurance policy on your property. You can save money at these costs:

  • Title Insurance Fee
  • Mortgage Insurance Fee
  • Lending fee
  • Home valuation fee

Maybe you can negotiate better terms

Since you have an established relationship with your original lender, the company can take additional steps to help keep you as a customer. Your lender may be willing to offer a lower interest rate or a lower rate quote from a competitor. This is especially true if you have a good credit history and have a proven record of making mortgage payments on time.

Also read: 6 Ways To Negotiate Home Closing Costs

The process could be faster and more convenient

It might be easier to refinance with the same lender since you already have an established relationship. The company has your information archived, including your payment history and financial details, so they may be able to tweak some of the documents required for a refinancing.

If the bank or credit union that you use for your personal finances will also handle your home loan, it may be more efficient to keep everything under one roof.

Disadvantages of refinancing with the same lender

Sometimes change can be good. Switching your mortgage lender can be a good idea if they cannot complete your loan quickly, provide poor customer service, or fail to offer you the lowest interest rate.

You could have capacity issues

According to the national real estate database ATTOM data solutions, refinancing in the first quarter of 2021 was at its highest level in more than 14 years. That means financial institutions were busy issuing a record number of home loans. If your original lender is popular, there may be delays in closing.

As part of the loan buying process, you need to ask your lender if they have the capacity for another refinance loan and how long it might take. Across the industry, lenders take an average of 47 days to complete refinancing loans, according to data from ICE mortgage technology – but some are able to change things faster.

You might get better customer service elsewhere

Each mortgage lender offers different services. Some financial institutions have an end-to-end digital process that focuses on efficiency and savings, while others offer brick and mortar branches to provide personal assistance. In addition, some lenders have higher levels of customer satisfaction.

If you are not satisfied with your original lender or current loan service provider, switching lender could give you a better experience.

You could save some money

Shopping from different lenders is the best way to save money on the interest rate and closing costs. Your lender knows the interest rate you are currently paying and may offer you slightly lower terms. However, if you receive price quotes from multiple lenders, you can use the information to negotiate.

Credible makes it easy to compare different lenders and refinancing options. In just a few minutes, you can see personalized prequalified rates from all of our partner lenders. Checking prices with us is free and safe and does not affect your creditworthiness.

Find out if a refinance is right for you
  • Actual rates from multiple lenders – Get the actual pre-qualified installments in 3 minutes without compromising your creditworthiness.
  • Smart technology – We streamline the questions you need to answer and automate the document upload process.
  • End-to-end experience – Complete the entire origination process from price comparison to closing, all on Credible.

Find my refi price
Checking the prices does not affect your balance

How to negotiate with the lender

You can refinance a mortgage with the same lender, but negotiating the details is important so you can save money. Follow these steps to get the best deal:

  • Get price quotes from multiple lenders. Compare the interest rate to be paid with the closing costs and your monthly loan payment. Credibility can help.
  • Ask other lenders to offer a better rate. Take the best offer and ask the other lenders to offer a better interest rate or better closing cost – or both. Your original lender may be more willing to compete for your business knowing you are shopping.
  • Consider paying rebate points. A discount point is a fee that you can pay at a lower interest rate. If you know you will be home long enough to cover these costs, it might be worth it.
  • Get everything in writing. If a lender offers a better deal, ask them to send it to you in writing.

Continue reading: What to Expect When You Close a House

About the author

Kim Porter

Kim Porter is an expert on credit, mortgage, student loan and debt management. It has been featured in US News & World Report, Reviewed.com, Bankrate, Credit Karma, and others.

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