What should I expect to pay to refinance a mortgage with the
mortgage company I already have? Will the company negotiate and reduce some fees
for an existing customer? -- Dan Do-over
It just seems logical that it would be easier and less expensive
for your existing lender to refinance your home. After all, they know your payment
history, and they know the property.
The lender may not need
a new property appraisal, a title search or other items that would normally be
required on a new loan. They should also be willing to offer a better price because
it's easier to keep a good customer than it is to find a new one.
holy grail of refinancing is when the lender just reduces your interest rate and
doesn't require you to close on a new loan. This can only happen if you are just
rolling your existing balance and aren't looking for a cash-out refinancing.
why doesn't it happen more often? The problem is that the mortgage market is divided
into three lines of business: mortgage origination, mortgage servicing and mortgage
If the firm that originated your existing mortgage
didn't retain the servicing, then you aren't a current customer. If the firm servicing
the mortgage doesn't do originations in your market, then they may not be interested
in your business.
Finally, mortgage investors are looking
for packaged or securitized mortgages that are part of a pool of mortgages, so
they aren't interested in your stand-alone business.
current servicing provider what cost savings they offer to current customers who
refinance with them. You also need to find out what terms competing lenders offer.
Saving a few hundred dollars in
closing costs doesn't mean much if you can get a lower interest rate from another
rates on Bankrate.com before talking to your current servicing provider, so
you will be able to recognize a good deal and use Bankrate's refinancing
calculator to determine your refinancing savings.
comparison worksheet from the FTC can help decide between lenders.
you are going to apply at several lenders, you should do it within a 30-day period.
Your credit score won't be hurt by comparison shopping for a mortgage if you concentrate
your applications within this time frame.
That's because Fair
Isaac & Co. Inc. (the company that works with the credit reporting agencies
to provide your credit score to lenders) considers these multiple mortgage inquiries
as one inquiry when calculating your credit score.