Is it Cheaper to Refinance with Your Current Lender?
Refinancing can help lower your interest rate, reduce your loan term, and provide you with better features than you had before. Often, most borrowers choose to refinance with a different lender. Is it cheaper to refinance with your current lender? It depends on your lender. If they’re willing to negotiate with you, it may be cheaper to refinance with your current lender. However, it may be cheaper to find a lender who can offer you better rates if they’re not.
What are the Pros and Cons of Refinancing with Your Current Lender?
The closing costs of refinancing can be hefty. Therefore, any savings your lender can offer you may make refinancing worthwhile. Also, because you are already a customer, they should have your repayment history on file, have a current property valuation, and have most of the administration stuff done. As a result, they may be able to reduce some of the fees you’re charged and can make the process easier.
However, despite these advantages, there are some disadvantages of refinancing with your current lender:
- First, you may not always get their best offer. They know your current interest rate, but you may not know their lowest rate. This gives them the upper hand in negotiations allowing them to offer you a rate that’s somewhere between their lowest rate and what you’re currently paying.
- Second, you still need to compare rates. Your lender may not be willing to negotiate with you unless you are serious about switching lenders. Therefore, you not only need to know what other lenders are offering, but you may need to submit a pricing request to get the process started.
If you are looking to refinance your mortgage, the brokers at Mortgage House can help you refinance to a new loan with competitive interest rates and beneficial features.