If interest rates drop or your financial situation changes, refinancing your home loan might be a smart move. But can you refinance with your current bank or should you shop around?
While going back to your original lender is an option, shopping around helps ensure you’re getting the best refinance offers. Depending on what your refinance goals are, your original lender may not offer the right loan product or pricing for your needs.
Here are some of the pros and cons of same-lender refinancing and how it works so you can weigh your refi options with confidence.
Can you refinance with the same bank?
You can refinance your home loan with the same bank or mortgage lender. Some homeowners apply for a mortgage refinance with their existing lender because they liked working with their loan officer or received great customer service. Same-bank refinance benefits might include discounted loan pricing and streamlined refi options for existing customers.
“The loan officer is going to be able to pull up your old file and transfer all of your information into a new loan file,” says Rose Krieger, a home loan specialist with Churchill Mortgage in Spokane, Washington. “There's going to be documents that we're probably not going to need because we already have them, so that's always a plus."
The benefits of shopping around for a refinance
Just because you can use your current lender to refinance doesn’t always mean you should. This is where shopping around is crucial.
By comparing refinance rates, loans, and lenders, you’re more likely to get a better deal and work with the right lender who can help you meet your specific goals. Additionally, shopping around with other lenders can help you decide whether refinance is the best option for you.
With mortgage rates remaining higher for longer, borrowers can potentially save as much as $600 to $1,200 on their home loans each year by shopping around with multiple lenders, according to research from Freddie Mac.
Note:
The lender that closed your loan when you bought your home may not be your current loan servicer (the company you make monthly payments to). Lenders often resell the mortgages they originate on the secondary mortgage market after closing.
Pros and cons of same-bank refinancing
Pros
- Streamlined application process because your lender knows your property and history
- Potentially faster closing timeline
- May not have to provide as much documentation as a new lender
- Access to loyal client perks like reduced lender fees or lower mortgage rates
- An existing relationship might give you more negotiating power
Cons
- Might pay higher lender fees and refi closing costs if you don’t shop around
- Could miss out on lower interest rates and better loan products from other lenders
- Existing issues with customer service or technology won’t change
- Less negotiating leverage if you don’t have other offers for comparison
- Miss out on new customer promotions from other lenders
How to refinance with your current lender
Once you’ve decided on a mortgage refinance with your existing lender, you’ll complete a refinance loan application.
Here’s a step-by-step guide on how to refinance with your current lender:
- Review your current loan terms and payment history.
- Check your credit score and credit report to know where you stand.
- Gather all financial and employment documents so you can apply with multiple lenders.
- Research current mortgage rates and your bank’s refinance offerings.
- Contact your lender’s refinance department.
- Ask if there are special programs or refi discounts for existing customers.
- Apply for a mortgage refinance to get a loan estimate in writing.
- Review all loan fees, terms, and deadlines carefully, especially closing costs.
- Get an appraisal to confirm your home’s current market value (most lenders require this).
- Close on your new loan. This time around, the process will be more straightforward and likely quicker than your original purchase mortgage.
- Confirm that your old loan has been paid off and start making your new mortgage payments to your lender.
- Watch for communications from your lender if it resells your loan to another servicer. Both companies will notify you of this event in writing.
During the refinance process, be ready to negotiate and compare offers. Remember that being an existing customer doesn’t mean your bank or servicer has the best deal for your needs; it always pays to shop around.
Should you refinance with your bank or choose a new lender?
The decision to refinance with your lender or choose a new one ultimately comes down to your research and deciding which lender has the best mortgage rates, lowest closing fees, and the best service. Start by getting a refinance quote from your current lender, then shop around with at least two or three other companies to compare offers.
“You’ve got to explore the promotions and discounts that lenders offer because it could be worth some serious savings in your pocket if they have an offering that helps you,” Hanson says. “But I don’t think shopping is ever bad.”
As you compare refinance loan estimates and talk to various lenders, evaluate:
- Interest rate
- Annual percentage rate (APR)
- Closing costs
- Lender fees
- Processing time
- Appraisal requirements
- Customer service quality
- Technology capabilities
Doing some homework on individual loan officers is important, too, Hanson says. Consumers can look up a mortgage professional’s license through the Nationwide Multistate Licensing System (NMLS). Search the NMLS Consumer Access website to see if loan officers or mortgage brokers have any disciplinary actions, how long they’ve stayed at companies, and how much experience they have, Hanson says.
Tip:
Pay close attention to the refinancing fees as you compare your original lender to other companies.
“Rates may be very similar everywhere you go, but fees aren’t always so pay close attention to the loan estimate,” she says. “Take a look at those fees. Are they charging origination or application processing fees?"
Can you refinance with the same bank FAQ
Is it easier to refinance with your current lender?
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Do banks offer lower rates for existing customers?
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What documents are required to refinance with the same bank?
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Can you negotiate closing costs when refinancing with your bank?
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How do I decide between refinancing with my bank or switching lenders?
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