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Should You Refinance With the Same Lender?

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Choosing to refinance with the same lender can feel like the simplest and most streamlined solution to replace your existing mortgage, but there’s a lot to consider before you take that step. It’s smart to first explore what other lenders have to offer to ensure your current lender has the best deal for you. 

Can you refinance with the same lender?

The short answer is yes, you can refinance with the same bank or lender.

If you’re satisfied with your current lender, that could be enough motivation to stick with that lender for your refinance. But while the benefits of good customer service may be a perk if you stay put, you’ll still want to ensure your existing lender can meet your refinancing goals before you sign on the dotted line. 

If you do work with your current lender, be sure to fully understand the new loan terms. Just because you’ve worked with this lender previously doesn’t mean you shouldn’t scrutinize everything. If you’re struggling with whether the new loan terms make sense in the long run, a mortgage refinance calculator can help you get a better understanding. 

Things You Should Know

The lender that originated your mortgage isn’t necessarily the same company you’ve been dealing with and making payments to since your closing date. Some lenders transfer or sell loans to a mortgage servicer after closing, effectively handing you off to a different company altogether.

Be sure you know who your current lender is and, if being transferred rubs you the wrong way, don’t feel that you have to go with the same company for your refinance. Only 15% of homeowners in your shoes would consider sticking with their original lender when they refinance, according to J.D. Power data

Advantages of refinancing with the same lender

Some benefits of working with your current lender on a refinance include: 

  • Having an established relationship. Familiarity helps when it’s time to reach out with questions or navigate the lender’s payment processes, all while keeping your personal finances as streamlined as possible. 
  • Paying lower fees. If your lender is invested in keeping you as a client, you may have lower refi costs. 
  • Enjoying a potentially shorter timeline. It takes 45 days on average to close on a refinance. Working with your current lender could get you to the closing table faster. 

Disadvantages of refinancing with the same lender

  • Missing out on better offers. Having a great relationship with your existing lender is worth a lot, but you also need to weigh this against the bottom line. If you don’t look at what products and rates competitors can offer, you could be leaving a ton of savings on the table. 
  • Negotiating at a disadvantage. Your lender knows how much interest you currently pay on your loan, which means they can offer you a slightly lower interest rate for your refinance without having to truly compete with other lenders. This is why you’ll still need to negotiate and shop around, even if end up sticking with your current lender.  
  • Not getting the customer experience you want. Some lenders lean into new technologies more than others, and it pays to go with one that shares your values. If you want digital document submission, e-closing or a mobile app, you’ll need to search for a lender as invested in the online experience as you are. 
  • Having to resubmit documentation. You may expect that, since your lender has all of your documentation from a previous loan, you’ll save time and effort this time around. Unfortunately, that may not be the case. You’ll likely have to undergo a new credit check, recertify your employment, get a new home appraisal and submit many other documents all over again. 

Closing costs on a refinance with the same lender

You’ll pay closing costs on a refinance, just as you did when you first took out your existing mortgage. Refinance closing costs can range from 2% to 6% of your loan amount, depending on the size of your loan. The average cost of a refinance is around $5,000, according to Freddie Mac. 

You could see lower closing fees, though, if you refinance with the same lender because lenders recognize that they stand to lose if you take your business elsewhere. Examples of loan terms you can negotiate include: 

  • No (or lower) title insurance fee 
  • No additional (or lower) mortgage insurance fee 
  • No (or lower) loan origination fee 
  • No (or lower) application fee 
  • No (or lower) survey or inspection fees 
Tip. Watch out for no-closing cost refinances, as they usually charge higher interest rates and have higher monthly payments. This may be a necessary trade-off if you don’t have the cash to cover closing costs or if you plan to move soon, but be sure you know what you’re getting into and whether it supports your financial goals. 

Why you should shop around for your mortgage refinance

It’s wise to shop around for a better deal to find the best pricing for you, even if you’re prepared to refinance your home with the same lender. A mortgage is one of the largest and longest financial responsibilities you’ll ever have and — because of that extended timeline — seemingly small factors can make a world of difference. 

Do your due diligence by: 

  • Asking for lender recommendations from family members and friends. More than two-thirds (68%) of borrowers find their lender through a personal relationship. 
  • Checking lender reviews to help you identify potential mortgage companies with which you’d do business. 
  • Shopping around with at least three to five lenders to ensure you’re getting the most competitive offers. If it helps, you can use a mortgage shopping worksheet to track everything as you compare offers. 

If you want the most cost-effective refinance, focus on comparing interest rates, closing costs and ongoing fees. These are the variables that can end up making a huge difference to the home’s total cost. 

When filling out your mortgage applications, FICO recommends rate shopping within a 30-day period to minimize the impact on your credit score. When the credit agency sees that you’ve made multiple inquiries in a specific time period, it recognizes that you’re likely rate shopping and counts them as a single inquiry. This time period can ultimately range from 14 to 45 days, though the length will ultimately depend on when the inquiries are made and which scoring formula is used. 

You’ll receive a loan estimate within three business days of each refinance application. Compare the offers you receive from each lender, and take the time to review all loan terms and estimated fees. 

How to negotiate a refinance offer 

Negotiating refinance offers works much like any other negotiation. Take the following steps to work your way toward the best possible deal. 

Gather your loan estimates and review the numbers Focus on the estimated interest rate, annual percentage rate (APR) and loan term, as well as upfront and ongoing loan costs.

Ask each lender if they’ll lower or waive some of the refi costs Request an appraisal waiver and lower origination fees. It may also be worth buying mortgage points to get a lower rate.

Make lenders aware that you’re shopping around If you share this info, they’re more likely to compete for your business. 

Pay attention to the services you can choose Page 2 of your loan estimate includes third-party services you can shop for, including the title search and insurance, pest inspection and property survey. 

Ask about a custom loan term Do you want to have your house paid off by the time you’re ready to retire? Or how about the same year your kid will graduate from high school? Many lenders now allow you to choose your own loan term and put things on a timeline that makes sense for your life. 

Refinancing your mortgage is more about the financial benefit you’ll get from the new loan than the lender you choose. Pick one that provides the most favorable terms and pricing — even if that means ditching your current lender.

 

Today's Refinance Rates

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  • 5.76%
  • 3.31%
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