Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. By refinancing your mortgage, total finance charges may be higher over the life of the loan.
Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."
You have plenty of financial institutions to choose from when refinancing a mortgage. But if you were happy with the place that originally funded your loan, you might be wondering if you should refinance with that same lender.
Before making the decision, you’ll need to understand your own goals and shop around to find the right fit.
Here’s what to consider if you’re looking to refinance with the same mortgage lender:
- Can you refinance with the same lender?
- Advantages of refinancing with the same lender
- Disadvantages of refinancing with same lender
- How to negotiate with 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 refinance loans quickly and efficiently
Before you go down this path, you’ll need to find out:
- Who’s your loan servicer? Your mortgage lender is the institution that funded your home loan, but it might not be the same company that now processes your payments and manages your account. Since your loan servicer might not originate loans, you’ll want to be sure you’re talking with the right company.
- Do you need to honor a waiting period? Some lenders make borrowers wait at least six months before they’ll refinance a home loan. So if you recently closed on your mortgage and you want to refinance with the same lender, you’ll need to ask if it’s possible.
- Does your original lender offer what you need? There are many different types of refinance loans, such as rate-and-term refinances and cash-out refinances. Some lenders also offer programs like the FHA streamline and VA streamline refinances. Make sure your original lender can meet your refinancing goals.
Learn More: Mortgage Refinancing Calculator
Advantages of refinancing with the same lender
Refinancing your mortgage with the same lender has two major benefits: money savings and convenience.
You might save money
Like your original mortgage, there are costs to refinancing a home loan. These closing costs typically range from 2% to 5% of the total loan amount — or about $5,000 on average, according to Freddie Mac.
However, your lender could waive or reduce certain fees if they already have an appraisal report, title information, and a mortgage insurance policy on your property. You could save money on these costs:
- Title insurance fee
- Mortgage insurance fee
- Loan origination fee
- Home appraisal fee
You might be able to negotiate better terms
Because you have an established relationship with your original lender, the company might take extra steps to keep you as a customer. Your lender might be willing to match a lower interest rate or closing cost quote from a competitor. This is especially true if you have good credit and a record of making on-time mortgage payments.
Also Read: 6 Ways to Negotiate Home Closing Costs
The process might be quicker and more convenient
It could be easier to refinance with the same lender since you already have an established relationship. The company has your information on file, including your payment history and financial details, so it might be able to streamline some of the documents required on a refinance.
Plus, if the bank or credit union you use for your personal finances underwrites your home loan as well, it might be more efficient to keep everything under one roof.
If you think refinancing is the right move, Credible makes it easy. You can compare multiple lenders and see prequalified rates in as little as three minutes without leaving our platform.
Disadvantages of refinancing with same lender
Sometimes change can be a good thing. Switching your mortgage lender might be a good idea if it can’t close your loan quickly, offers bad customer service, or it isn’t giving you the lowest rate.
They might have capacity issues
According to national property database ATTOM Data Solutions, refinances during the first quarter of 2021 were at the highest levels in more than 14 years. That means financial institutions have been busy churning out a record number of home loans. If your original lender is popular, you might experience closing delays.
As part of the loan shopping process, you’ll need to ask your lender if it has the capacity for another refinance loan and how long it might take. Across the industry, lenders are taking 47 days on average to close refinance loans, per data from ICE Mortgage Technology — but some are able to turn things around more quickly.
You might get better customer service elsewhere
Every mortgage lender provides different services. Some financial institutions have an end-to-end digital process that emphasizes efficiency and savings, while others offer brick-and-mortar branches to provide in-person help. Furthermore, some lenders have higher customer satisfaction ratings.
If you’re not happy with your original lender or current loan servicer, switching lenders could give you a better experience.
You could lose out on money savings
Shopping around with different lenders is the best way to save money on the interest rate and closing costs. Your lender knows the rate you currently pay, and it might offer you slightly lower terms. But when you get rate quotes from multiple lenders, you can use the information to negotiate.
Credible makes comparing different lenders and refinance options easy. In just a few minutes, you can see personalized prequalified rates from all of our partner lenders. Checking rates with us is free and secure, and it won’t have any effect on your credit score.
How to negotiate with lender
You can refinance a mortgage with the same lender, but it’s important to negotiate the details so you save money. Follow these steps to get the best deal:
- Get rate quotes from multiple lenders. Compare the interest rate you’ll pay along with the closing costs and your monthly loan payment. Credible can help with this.
- Ask other lenders to offer a better rate. Take the best offer and ask the other lenders to offer a better interest rate or closing costs — or both. Your original lender might be more willing to compete for your business if it knows you’re shopping around.
- Consider paying discount points. A discount point is a fee you can pay in exchange for a lower interest rate. If you know you’ll be in the home long enough to recoup this cost, it could be worthwhile.
- Get everything in writing. If a lender offers a better deal, ask it to send it to you in writing.
Keep Reading: What to Expect When You Close on a House