Should You Refinance With the Same Lender? How To Decide
September 10, 2021
By Erica Sweeney
May 3, 2021
Refinancing the mortgage on your home can be a smart way to save money. After all, interest rates on home loans change over time, so you might find a better deal today.
Not sure where to start? Try plugging your current loan details into a mortgage calculator or a refinance calculator to find out where you stand, and to see how much a refinance could save. Since different lenders may offer different interest rates and terms, it’s always wise to shop around and compare offers.
But you might be wondering: What about your current lender—wouldn’t refinancing with it be much easier than going through the home loan process somewhere else?
While refinancing with your current lender may come with some benefits, it’s not always the right decision. Here’s a look at the pros and cons of refinancing with your existing mortgage company, and how surveying other options could work to your advantage—even if you end up staying with your original lender anyway.
The benefits of refinancing with your current lender
Refinancing with the lender that holds your mortgage offers many benefits—the biggest being convenience. This lender already has your financial information, including payment history, income, and credit history.
“They have easy access to your existing mortgage information, which could speed up the process,” says Lauren Anastasio, a certified financial planner at the online personal finance company SoFi. “Additionally, you already have a relationship with your lender.”
It can be faster to refinance if you choose to remain with that lender, rather than beginning the arduous process with a new one.
Your relationship with your current lender could mean that it will offer lower fees to refinance, such as loan origination fees, says Sarah Pierce, head of sales and operations at the digital mortgage company Better. It may also waive a home appraisal, at an average cost of about $340, according to HomeAdvisor.
“If you are getting the benefit of some monthly payment savings and your current lender is offering you a streamlined documentation refinance without an appraisal, it may be worth your time to take the offer, even if the rate is slightly higher than at other lenders,” Pierce says.
However, your current lender’s rates might be significantly higher than elsewhere—which is why it’s always good practice to check out what others have to offer.