Get at least two Loan Estimates, one from your current lender and one from a broker or a different lender, before you refinance. On a $400,000 balance, a rate that is 0.25% lower saves about $68 a month, and the only way to know if you can get it is to ask someone besides the company that already has your loan. Staying put is easy. Easy is not the same as cheap.

Why the current lender is not automatically the best deal

Your servicer sends you refinance offers because it wants to keep the loan. That is a fair reason to call you, and a bad reason to stop shopping. A lender that has your loan has no pressure to beat anyone else, because most people never ask.

That said, the current lender can win. It may waive part of the fees, skip a step, or move faster on a streamline loan. I have seen it. I have also seen a client's own lender quote 7.375% on the same day another quote came in at 7.125%. The only way anybody knows which one it is, is to get both in writing.

What a broker does differently

A mortgage broker is a licensed professional who shops your file to several wholesale lenders and brings you the best fit. Your bank offers its own products. A broker can offer many. That matters most when your file is not plain: self-employed income, a rental property, a recent credit dip, or a loan that does not fit a standard box.

Brokers are paid either by the lender or by you, and the Consumer Financial Protection Bureau's Loan Estimate guide shows where every charge appears on the form. Do not take anyone's word on cost, mine included. Use the form. Our guide on how to choose the best mortgage broker in Arizona lists what to ask before you sign anything.

The math on three real-looking quotes

Here is a $400,000 refinance at 30 years, quoted three ways. The rates and costs are illustrative, built to show the shape of the decision, not a quote you can lock today. For reference, Freddie Mac's 30-year average was 7.28% on October 1.

Quote A has the lowest upfront cost and the highest bill. Over five years, Quote B saves $3,270 and Quote C saves $4,389 against it. Quote B costs $800 more up front and saves $68 a month, so it pays back in about 12 months. Quote C costs $1,700 more and saves $102 a month, so it pays back in about 17 months. If you plan to be in the house longer than that, the cheaper-looking quote is the expensive one. Our post on the refinance break-even point shows how to run this on your own loan.

The lowest closing cost is not the lowest total cost. Divide the extra fees by the monthly savings.

How to shop without wrecking your credit

Do it all in one week. Credit scoring models generally count several mortgage inquiries in a short window as one, and our post on applying to multiple lenders covers the window rules in detail. Then compare the Loan Estimates line by line:

• Rate and APR. The rate sets your payment. The APR tells you what the fees add.
• Sections A, B, and C. These are the lender's charges and the third-party services. Fees you can shop for are the ones to push on.
• Credits and points. A lower rate that costs points is not the same as a lower rate that is free.
• Cash to close. Escrow deposits and prepaid interest can change this number more than the rate does.

Run your own numbers

Where the fees hide

The rate gets the attention, but the fees decide the winner. Lender charges in section A of the Loan Estimate are the ones that vary most. Title, appraisal, and recording sit in sections B and C, and some of those you can shop for yourself. Ask each lender for the same loan amount, the same lock period, and the same loan type. If one quote assumes a different lock period or leaves out a charge, you are not comparing two offers. You are comparing two stories.

Ask one more question: is anything on the quote negotiable? Origination charges often are. A written competing quote is the best leverage you have, and a broker or lender who cannot move on fees will usually say so quickly.

When staying with your current lender makes sense

There are cases where the current lender wins, and I would rather say so than pretend otherwise. If you hold an FHA or VA loan and qualify for a streamline, the servicer may do it with less paperwork and a lower fee. The Department of Veterans Affairs home loan page covers the VA side of that. Our guides on FHA streamline refinances and the VA streamline refinance explain the rules and the net tangible benefit test.

It also makes sense when your lender gives you a written quote that matches or beats the market. Ask them to match a competing Loan Estimate. If they will, you save the time. If they will not, you learned something.

What rates are doing right now

Rates are going the wrong way for refinancers. Freddie Mac's 30-year average rose to 7.28% on October 1, from 7.03% the week before, and Forbes reported on September 29 that markets expect more Fed hikes on October 28 and December 9. That makes shopping more urgent, not less. A quote that is good today may not be good in three weeks. If you are a Phoenix homeowner who bought in 2023 at a higher rate, read our post on whether to refinance if you bought at 7% before you apply.

What this means for Scottsdale and Valley homeowners

Equity in Maricopa County is still strong for many owners, and a better lender choice can decide whether a refinance is worth doing at all. The Homes.com Phoenix housing market report is a quick way to check recent values before you order an appraisal. If you are also looking at your next home, the Arizona Luxury Property Search covers Scottsdale and Metro Phoenix. Our loan programs page shows what we shop, and how our refinance process works shows the steps from first call to closing.

Want a real quote to compare against the one you have? Start at pillarmortgagegroup.com, book a call, or fill in the form below. I will run it with you.

Frequently asked questions