As a homeowner, you know that interest rates are constantly changing. You might find a better deal today than you did when you mortgaged your home. If that is the case, refinancing your mortgage could be a smart way to save money.
Refinancing with your current lender can offer benefits, but it might not always be the best option for you. Different lenders offer different interest rates and terms, so it is always wise to shop around and compare offers.
Read more to learn about the benefits of refinancing with your existing mortgage company, and if searching for a new lender is right for you.
Benefits of staying with your current lender
Refinancing with your current mortgage lender offers the biggest benefit of them all: convenience. They already have your financial information, including payment history, income, and credit history.
You also have built a relationship with this lender. This relationship can make for a speedy process and could even mean lower fees associated with refinancing, like waiving a hefty home appraisal cost.
Even with these benefits at hand, your current lender’s rates may be noticeably higher than elsewhere.
If you happen to come across a better deal, this can give you leverage for negotiating with your current lender. Existing lenders might match a lower interest rate and alter the loan terms or lender fees in hopes to keep the relationship strong.
Shopping around for a better deal
If convenience and time are not a priority, but saving money is, it may be wise to see what other lenders have to offer.
When shopping around for a new lender, it is important to look at more than just interest rates. Also compare loan fees, loan repayment terms, mortgage points, and products to make sure the loan fits your needs and budget.
Choosing a new lender will more than likely take more time since you will have to start from scratch filling out paperwork and providing documents.
If you decide to choose a new lender, this does not mean that you now must coordinate with two mortgage companies. Your new lender will do all the coordinating with your previous lender and you will have one mortgage payment.
The most important thing to remember is to pick a lender that provides rates and terms you can afford.
To find out what is right for you, get a loan estimate from multiple mortgage companies. This loan estimate will lay out all the costs associated with refinancing.
Having this all laid out will make it much easier for you to decide which lender is right for you.