This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

How to Refinance With Your Current Mortgage Lender

NEW YORK ( TheStreet) -- As mortgage rates drift upward, procrastinating homeowners have good reason to get a move on and refinance before the potential savings shrink to nothing. If you've got a mortgage charging 5.5% or 6%, a refi can still pay, even though you might end up with a 4.5% loan, not the below-4% rate of a while back.

But, gosh, all that shopping around is such a hassle! Would it be easier to just call you current lender and see what it can do for you?

That certainly should be the first step, as the lender you have might offer reduced fees or some other incentive to keep you. But it could work the other way, too, with the lender, assuming you'll stay put in the end, preferring to invest in a new customer.

So in the end you do have to shop around. It's complicated, says Jack Guttentag, emeritus finance professor at the Wharton School.

"A small group of borrowers might profit from refinancing with their current lenders -- the firms to which they remit their monthly payment," he says on his website, The Mortgage Professor. "Most lenders, however, will do better refinancing with a new lender."

The savings you'd realize by reducing your interest rate in a refi represent a lost income for your lender, even if it issues you a new mortgage. Still, a lender who is losing a lot of customers to competitors may take the initiative to offer you a new loan rather than wait for you to make the first move, Guttentag says. But this deal might not be as good as you could get elsewhere, as the lender wants to "give up as little as possible," he says.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,652.56 -20.04 -0.11%
S&P 500 2,054.08 +2.26 0.11%
NASDAQ 4,763.6890 +5.81 0.12%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs