Should you refinance with your current mortgage lender?
Quick insights
- Refinancing a mortgage with your current lender can be convenient because they have access to your loan details and personal info.
- The refinancing paperwork and process could be streamlined with the same lender, but you may want to compare terms across lenders.
- You may decide that any ease of refinancing with your current lender outweighs better terms that another lender offers, or vice versa.
Refinancing a mortgage can offer significant savings each month and as you continue working to pay off your home. Your current mortgage provider may offer refinancing; it’s often worth asking their representatives about the process and potential benefits.
By considering several factors, pros and cons, you can make an informed choice to refinance with your current lender or explore options with other lenders.
Can you refinance with the same lender?
Most banks or mortgage lenders allow you to refinance a current loan, subject to their specific eligibility criteria. If you apply, most lenders will evaluate your income information, credit score and loan-to-value (LTV) ratio. The loan terms you’re offered with a mortgage refinance, including your interest rate, vary based on several factors, including personal finances and market conditions.
Refinancing your mortgage can have similar benefits regardless of the lender you work with:
- Lower your monthly payment depending on the new rate and loan term.
- Stabilize your payment if you switch to a fixed-rate mortgage from an adjustable-rate mortgage (ARM).
- Own your home sooner if you refinance to a shorter loan term.
- Access your equity through a home equity line of credit (HELOC), home equity or cash-out refinance.
How to refinance a mortgage with your current lender
To start, contact your current mortgage lender to see if refinancing is offered and what the process involves. To confirm the terms a lender would offer you, you might have to apply. However, because you’re an existing customer, your lender may be able to provide accurate estimates before you apply. That’s because your loan and personal information are accessible, and they’re important factors in deciding mortgage refinance terms.
Refinancing with a different mortgage lender
Refinancing with a reputable mortgage lender is important, so research is a good first step. Like when you’re buying a home, applying for a mortgage refinance might require proof of income and identity, at least. Application processes can be similar across lenders, but you could be starting over with each company you’re interested in. That often means submitting all the documentation, completing required fields and talking to customer service.
How hard is it to refinance with another lender?
New lenders may offer incentives to gain your business, but you could have to gather documentation and submit applications each time. This can be advertised as a short process, and sometimes it is, but it might not be something you want to do five times.
Perhaps the only way you’ll know what the process involves is by researching different lenders. This could also lead you to get favorable refinancing terms. General trends can influence the terms you’re offered, but ultimately, it’s each lender who decides.
Is it better to refinance with my current lender?
What’s right for you depends on your home, situation and goals. The refinance terms a lender offers you are based on a variety of factors, not just your existing relationship.
There are some pros and cons of working with your current mortgage provider on a refinance:
Pros:
- Convenience: An established relationship with your lender can make refinancing smoother. They should have your information and loan history, so less paperwork and communication might be needed. Streamlined application, review and closing processes can be beneficial when refinancing a mortgage.
- Familiarity: You might be just as familiar with your lender as they are with you. Chances are, you know how to make payments, ask for help and manage your existing mortgage. Refinancing will change your loan terms, not the most fundamental aspects of your banking relationship.
- Continued service: If you’re happy with your lender, this can be reason enough to refinance in-house. Little about how your lender treats you should change if you refinance your mortgage with them.
Cons:
- Offerings: Your current lender may not offer the loan type you’re interested in. For example, if you have 25 years left on your mortgage, a 20-year loan may be a good fit. However, not all lenders offer 20-year mortgages.
- Fees: Refinancing usually requires closing costs. If you’re giving a bank new business, you might be offered certain incentives. These upfront costs can vary, and you won’t know without comparing. Your current lender may be better, worse or about the same.
- Terms: The interest rate and loan term can make refinancing worthwhile, as they affect how much a refinance would save you.
Is it easier than refinancing with another lender?
Your existing relationship with your lender could make the refinancing process more straightforward. The company’s familiarity with your mortgage details and payment history might make their review faster. Nowadays, already having an online profile and history with a company often makes working with them more straightforward. You might be familiar with how to submit documents, for example.
How you might decide
- Compare: Put the current lender’s offer against market estimates or actual lenders’ refinancing offers. The decision should fit your budget and goals, and without comparing rates across lenders, you won’t know if you’re getting the best terms.
- Review the costs: Upfront closing costs, new monthly payments and the impact of any interest rate change should align with your budget and goals.
- Weigh the pros and cons: Shopping lenders can be useful despite requiring more time to apply and consider the refinance terms you’re offered. On the one hand, you might want to choose the mortgage lender that offers the best combination of refinancing rates, terms and service. On the other hand, the benefits of working with your current lender may save time and give you peace of mind.
In summary
When you refinance a mortgage with your current lender, the process may seem more streamlined. The company already has your loan details and personal information, and your familiarity with their systems can make applying and closing smoother. However, despite a more streamlined process, better terms may be available with another lender.
If you’re interested in refinancing with Chase, you can start online or talk to a Home Lending Advisor.
