By Myrtis S.
on May 27, 2024
Read in 4 min

There are a lot of financial institutions to choose from when refinancing your mortgage. But if you were content with the institution that originally funded it, then why not consider going through them for another go-round?

Before you make your decision, make sure to shop around to get the best deal and clearly define your goals. 

The things to take into account include: 

— Is it possible to get your mortgage refinanced with the same lender?

— What are the advantages of refinancing with the same lender?

— What are the cons of refinancing with the same lender?

— How to negotiate with your lender?

Is It Possible To Get Your Mortgage Refinanced With the Same Lender?

Mortgage refinancing is the most popular way to lower monthly payments and save money. 28% of all homeowners who refinanced in Q1 2021 stayed with their current bank or lender, according to a Black Knight's report. So yes, it is possible. 

It might be a perfect choice for you if your bank/lender: 

— Offers discounts for returning borrowers

— Provides low interest rates

— Can close loan refinancing fast 

Here’s what you need to learn before making a decision: 

  • Who services your loan? Your mortgage lender is not always the company you contact to make your payments and manage accounts. As a borrower, you need to make certain you’re talking to the right people. 

  • Should you wait before refinancing? If you just closed on your mortgage and want to refinance with the same lender, be prepared for a wait. Some lenders make borrowers sit through at least six months before they'll consider another application.

  • Can your lender meet your needs? There are many types of refinancing loans, with each having its own pros and cons. For example, a rate-and-term refinance will have lower interest rates than what you originally paid, while cash out can help if your financial situation has improved. There are also programs like VA Streamline and FHA Streamline. Make certain your lender has something to offer you at this point.

What Are the Advantages of Refinancing with the Same Lender?

There are two important advantages when it comes to refinancing with the same lender: convenience and money savings. 

It can save you some money 

Refinancing a loan involves some costs, which might range from 2% to 5% of the loan amount. According to Freddie Mac, the cost of refinancing usually amounts to $5000 on average. 

But as long as you refinance it with the same lender, you might skip some fees, including home appraisal, title insurance, loan organization, and mortgage insurance fees.

The terms might be better 

Your lender might be glad to match a lower interest rate or closing cost quote from another company if you have been loyal in the past and offer them an opportunity for more business. This is especially true with a good credit score and on-time mortgage payments history.

It takes less time 

With an established relationship and financial information on file, refinancing should be easier for you. The company has everything it needs to process your request, including your financial details and payment history. 

Consider having your home loan underwritten by the same bank or credit union that handles all of your financial needs. This way, you can avoid excessive paperwork and fees.

What Are the Cons of Refinancing with the Same Lender?

There are situations when changing a lender might actually be a good idea. 

Your lender might have capacity issues 

The housing market is booming, and it seems like every bank in the country has been issuing mortgages at breakneck speeds. This means you might experience delays when trying to close your loan with your original lender if they are popular among potential customers right now. According to ATTOM Data Solutions, refinance rates during the first quarter this year were at their highest levels in more than 14 years. 

Make sure to ask your lender how long it might take to refinance. While most of the lenders need 47 days on average to close the deal now, some are able to do it faster — or slower. 

The customer service might not be perfect 

Every mortgage lender provides different services. Some 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. Is this something that you value the most? 

If you’re not a fan of the services provided by your current lender, it’s better to switch to another company that has higher customer satisfaction ratings. 

You could lose some money 

The best way to save money is to shop around with different lenders. While your lender already knows the rate you pay and can decrease it a bit, other companies can offer you better deals if you ask, plus you can use this information to negotiate the best deal with a current lender. 

How To Negotiate With Your Lender?

It’s possible to get your mortgage refinanced with the same lender, but make sure to follow these steps to save money and get the best offer: 

  • Get rates from several lenders. What are your interest rates? What are the closing costs and monthly payments?

  • Ask other lenders for better conditions. Inform your original lender that you are shopping around, and ask them to compete with other lenders. You might be able to get a better interest rate or lower closing costs if they know there's competition.

  • Think of paying discount points. One way to make the mortgage process more affordable is by using discount points. These are the fees that lower interest rates and make it worth paying, providing the house will stay with you long enough to recoup these costs.

  • Get everything written down. If there is a better deal for you, ask a lender to write it down for you. 

This is not legal, financial, or professional advice. Please consult a legal, financial, or professional advisor for your specific situation.