Multiple ATM machines in rows of three

Can You Move Your Mortgage to Another Bank?

The Short Version

  • As a rule, you can’t move your mortgage from bank to bank
  • Knowing the difference between a mortgage lender and a mortgage servicer will help you understand why moving a mortgage is difficult
  • If you want to move your mortgage, your best option may be to refinance

Contents

See what mortgage you qualify for

NMLS #3030

*See what you qualify for

We teamed up with Rocket Mortgage to help you get house-hunting sooner! Answer a few questions to get your commitment-free, personalized rate 💸

Get Started by selecting an option below

What kind of loan are you interested in?

What to expect

Tell us what you need and a representative from Rocket Mortgage will give you a call. You’ll have support at every step.

What kind of property do you want to purchase? What kind of property do you own?

Why we’re asking

Rocket Mortgage® can provide a more accurate rate estimate if they know what kind of property you’re interested in.

NMLS #3030
How do you use your property? How would you use this property?

Why we’re asking

Having a little more information upfront helps Rocket Mortgage® provide a personalized rate faster.

NMLS #3030
When are you planning to buy?

Still House Hunting?

Hope you find your dream home soon! In the meantime, it’s never too early to know your rate.

NMLS #3030
Are you a first-time home buyer?

It’s all good:

Whether it’s your first – or second property – Rocket Mortgage® can provide you with a rate estimate.

NMLS #3030
Do you have a second mortgage?

It’s all good

If you have a second mortgage, it’s no problem. Letting us know helps to customize your rate.

NMLS #3030
What is your credit score?

Don’t know your score?

Don’t sweat it! Make your best guess. Credit scores range from 300 (low) to 850 (excellent).

NMLS #3030

Tell us a bit more about you

What happens next?

A representative from Rocket Mortgage® will be in touch to discuss your commitment-free, personalized rate. Then you can decide whether you’d like to lock it in!

NMLS #3030

Enter your contact info so we can get in touch

By submitting your contact information you agree to our Terms of Use and our Security and Privacy Policy. You also expressly consent to having Rocket Mortgage, our Family of Companies, and potentially our mortgage partners contact you about your inquiry by text message or phone (including automatic telephone dialing system or an artificial or prerecorded voice) to the residential or cellular telephone number you have provided, even if that telephone number is on a corporate, state, or national Do Not Call Registry. You do not have to agree to receive such calls or messages as a condition of getting any services from Rocket Mortgage or its affiliates. By communicating with us by phone, you consent to calls being recorded and monitored.

NMLS #3030
Your information has been sent!

A home loan expert from Rocket Mortgage® will reach out to you soon with your personalized rate.

Your information has been sent!

A refinance expert from Rocket Mortgage® will reach out to you soon with your personalized rate.

Finding a mortgage lender is a bit like finding the right person to marry. After all, a home loan is probably the largest and longest loan you’ll ever take out. You could be in a “relationship” with your lender for up to 30 years. 

But what if things change and you slowly fall “out of love” with your mortgage lender? Can you move your mortgage to another bank, credit union or lender?


The short answer is no. That’s why it’s important to find the right lender from the beginning of your mortgage search. But the longer answer is a little more nuanced.

Mortgage Lender vs. Loan Servicer

From applying for your mortgage to making your monthly mortgage payments, it’s important to understand the role mortgage lenders play in the home buying process. 

Mortgage lender

When you get your mortgage, you get it through a mortgage lender, like a bank, a credit union or an online lender, and you go through a fairly standard process.

  • Preapproval: The lender reviews your mortgage application and gives you a letter that spells out how much they’re willing to lend you and what terms they will offer on your mortgage. 
  • Underwriting: Once you and the seller agree on the purchase price, your loan application goes through additional review by the lender.
  • Closing: Your lender has approved your loan and you meet with the seller to sign the necessary documents and pay your closing costs (which can equal between 2% – 6% of the loan’s value) to make the home sale final.

Loan servicer

After closing on the house, you’ll spend the next 10 – 30 years paying off your mortgage. During that time, your loan will need to be serviced, which means that your lender or another loan service provider will need to: 

  • Collect your payments and track your mortgage balance
  • Report your payments to the right credit bureaus
  • Transfer your mortgage principal and interest to whoever owns your mortgage
  • Pay your mortgage insurance and homeowners insurance carriers
  • Ensure that the money to cover your property taxes are transferred to your escrow account and then paid to your local town, county, city or state government agency
  • In some cases, send homeowner association (HOA) fees to your HOA or property management company
  • Work with you if you can’t make your payments

While some larger-sized lenders have their own loan servicing companies, many simply don’t have the bandwidth. Instead, smaller lenders will transfer your loan to a third-party loan servicing company. 

Your loan can be transferred from one loan servicer to another at any time over the life of your loan. The good news is that they can’t change the terms of your loan, and they have to give you 15 days’ notice before switching you to a new servicer.

So, when you think about moving your mortgage, it’s important to make the distinction between your mortgage lender and your mortgage servicer. 

If your issue is with the terms of your loan, you can’t move to another lender without refinancing (we’ll go into that later). 

If your issue is with your customer service, and the lender doesn’t service their loans, you won’t be able to ask your lender to switch you to a different loan servicing company.

In both cases, you can’t move your mortgage, you can only start over with a new loan.

Switching Lenders Before You Buy

Once you close on your loan, your mortgage can be sold and your loan servicing can be transferred without you having much say in the matter. 

However, there is one point in the borrowing process when you can move your mortgage. That window of opportunity comes before you close.

Reasons to switch lenders

Let’s say you get preapproved by a mortgage lender, but you don’t like the lender’s customer service or you get a better offer from another lender.

Or maybe your credit score dropped below 600 and your lender decides to raise your interest rate, or worse, deny your mortgage application. You may be able to find another lender who’s willing to approve you for a Federal Housing Administration (FHA) loan, which has a lower credit score requirement, and your mortgage could become more affordable.

Finding the right time to switch

Whatever your reason, if you want or need to switch lenders, do it before you buy the home. Ideally, it should be as early as possible. You may even be able to switch even after the loan has gone to underwriting. 

But keep in mind that changing lenders comes with a few headaches.

  • If you switch lenders during the home buying process, you may delay the closing, which may not win you the love of your real estate agent or the seller, and could cause the sale to fall through.
  • You may need to have another hard credit check performed when you switch lenders, which may hurt (think: lower) your credit score. 
  • A new lender may request a new appraisal of the home. Besides the cost, a new appraisal puts you at risk of having the home valued lower or higher, which might involve renegotiating with the seller.

Don’t make the switch unless the other lender has reviewed your financial info and has preapproved you. Otherwise, you may end up losing both lenders, and you may have to withdraw your offer on the house.

Switching After You Buy

Once you’ve closed on your loan and started paying your mortgage, you’ve pretty much surrendered your window of opportunity to switch lenders. 

At this point, the only real option you have is to refinance your mortgage or, if you’re 62 years old or older, apply for a reverse mortgage.

Refinancing your mortgage

When you refinance your mortgage, you’re taking out a new loan that replaces your original loan. And the new loan can come with lots of new benefits: 

  • A new lender: When you refinance, you’ll want to look for a new lender who can offer better terms on your mortgage. A commercial bank or credit union may offer better customer service, and an online lender may be able to offer more competitive interest rates or lower fees.
  • Lower your interest rate: Reducing your interest rate by 0.5% or more can lower your monthly payments by hundreds of dollars.
  • Shorten your mortgage loan term: Refinancing to a shorter-term mortgage can help you save thousands of dollars in interest over the life of your loan and help you own your home sooner.
  • Get rid of mortgage insurance: If you were paying private mortgage insurance (PMI) on your original loan, refinancing may remove PMI.
  • Take cash out of your mortgage: If you have enough equity in your home (the difference between the current value of your home and what you still owe), you may be able to borrow more than you currently owe and pocket the difference as a low-interest loan.
  • Switch from an FHA loan to a conventional loan: If your original mortgage was an FHA loan, you may find that you’ll get a better interest rate and pay less in mortgage insurance premiums (MIPs) if you can refinance to a conventional loan. 

Besides being able to switch lenders, there are many reasons why taking advantage of a refinance might be worthwhile. 

Applying for a refinance works just like applying for a mortgage. You’ll go through the same mortgage-qualifying process you went through when you first bought the home. Because you don’t have to get your refinance through the lender who approved you for your original loan, refinancing can become another opportunity to switch your lender. 

But this isn’t always a foolproof plan. 

Because of all the moving and selling in the mortgage industry, you may wind up with the same servicer you started with.

What To Do When You Can’t Move Your Mortgage

Once a lender starts servicing your mortgage, there is no “easy” way to move your loan to another lender. That’s why it’s important to find the right mortgage lender from the start. You can also try and learn which loan servicers your lender works with before you commit to a mortgage offer. 

Otherwise, refinancing, which comes with many benefits – like lowering your interest rate, shortening your mortgage term and getting rid of mortgage insurance – may be your best option.

Get approved to buy a home.

Rocket Mortgage® lets you get to house hunting sooner.

You Should Also Check Out…