Can You Change Mortgage Companies?

Buying a home or refinancing a mortgage can be a lengthy and complex process. It’s not uncommon for borrowers to wonder, mid-process or even after closing, whether they can switch to a different mortgage company. Whether you’re unhappy with your current bank or lender’s service, found a better financing deal elsewhere, or simply want more favorable terms, changing mortgage companies is possible — but the timing and the process matter. In this publication, we’ll explain when and how you can switch mortgage companies, the pros and cons, and key considerations to keep in mind.

Can You Change Mortgage Companies Before Closing?

Yes, you can switch mortgage lenders before you close on your loan. Until you sign the final documents at closing, you are not legally obligated to a particular lender. If you find a better rate, better service, or a different loan product elsewhere, you have the right to change lenders.

However, switching lenders late in the mortgage process could result in delays and additional costs. You would likely need to:

• Submit a new mortgage application

• Undergo a new credit check

• Pay for a new appraisal (if the original appraisal is not transferable)

• Provide updated income and asset documentation

Switching lenders early in the process—such as during the preapproval stage—tends to be much easier and less costly.

Pro Tip: Always compare mortgage offers carefully using a Loan Estimate form, which shows interest rates, loan terms, and closing costs in a standardized format.

Can You Change Mortgage Companies After Closing?

Once you’ve closed on your home loan, you cannot switch mortgage companies in the traditional sense without refinancing your mortgage. Mortgage refinancing is the process of taking out a new mortgage to pay off the existing one, typically with a new lender.

Common reasons homeowners refinance with a new mortgage company include:

• Lower interest rates

• Better loan terms (shorter loan period, fixed-rate option)

• Access to home equity through cash-out refinancing

• Poor customer service from the original lender

However, mortgage refinancing involves new closing costs, an updated appraisal, and qualification criteria based on your income, assets, and credit score.

Why Do Mortgage Companies Sell Loans?

Even if you don’t switch banks or mortgage lenders voluntarily, your mortgage might be sold to another company after closing. Lenders frequently sell loans to real estate and mortgage note investors such as Fannie Mae, Freddie Mac, or other financial institutions to free up capital and reduce risk.

When your home loan is sold:

• Terms of the loan (interest rate, payment amount, etc.) stay the same.

• The company you make payments to may change.

• You should receive a written notice informing you of the transfer.

Under the Real Estate Settlement Procedures Act (RESPA), borrowers must receive notification at least 15 days before any servicing transfer, and there is a 60-day grace period during which late payments cannot be penalized. (Consumer Financial Protection Bureau, 2023)

How to Change Mortgage Companies Before Closing: Step-by-Step

If you’re still in the loan process and want to switch lenders, here’s what to do:

1. Get a New Loan Estimate
   Request a Loan Estimate from the new lender within three business days of applying.

2. Cancel the Old Loan Application
   Inform your current lender immediately to avoid unnecessary credit pulls and processing fees.

3. Transfer or Reorder an Appraisal
   If your home appraisal is complete, check if the report can be transferred. If not, you’ll need a new appraisal.

4. Provide New Documentation
   Submit updated pay stubs, bank statements, and tax returns to the new lender.

5. Expect Timeline Adjustments
   Be prepared for a longer closing time, depending on how far along you were with the first lender.

How to Change Mortgage Companies After Closing

If you’re considering switching lenders after closing, you’ll need to refinance. Here’s how to approach it:

1. Check Current Mortgage Rates
   Make sure refinancing will save you money, not just move you to a new company.

2. Calculate Break-Even Point
   Understand how long it will take to recoup refinancing costs through monthly savings.

3. Shop Multiple Lenders
   Compare offers from banks, credit unions, and online lenders to find the best refinance terms.

4. Lock Your Rate and Apply
   Once you find a favorable offer, lock your rate and begin the application process.

5. Close on the New Loan
   Use the funds from the refinance to pay off your old mortgage, and start payments with your new lender.

Pros and Cons of Switching Mortgage Companies

Example 1: Switching Mortgage Lenders Before Closing

Jessica was in the process of buying her first home. Initially, she chose a lender based on a recommendation from her real estate agent. However, after receiving her Loan Estimate, Jessica found another lender offering 0.5% lower interest and $2,000 fewer closing costs. She switched lenders midway through underwriting, delaying her closing by one week but saving over $30,000 over the life of her loan.

Example 2: Mortgage Refinancing After Closing

David and Lisa purchased a home in 2022 with a 7.25% mortgage interest rate. When rates dropped to 6.25% in 2025, they refinanced with a different lender. Although they paid $4,500 in closing costs, their new loan reduced their monthly mortgage payment by $250, and they broke even on refinance costs within 18 months.

Takeaways:

Can you change mortgage companies? Absolutely.
Whether you switch during the mortgage approval process or refinance later, borrowers have options. Just be mindful of timing, costs, and potential delays. Always compare Loan Estimates side-by-side and ensure switching will truly benefit your financial future.

Changing mortgage companies can lead to better loan terms, lower monthly payments, and a more satisfying customer experience—but it’s crucial to evaluate the pros and cons carefully before making a move.

References

Consumer Financial Protection Bureau. (2023). What happens if my mortgage loan is sold to another company? 

Fannie Mae. (2024). Understanding Mortgage Transfers.

RefiGuide.org. (2024). When is the Best Time to Refinance Your Home?

NerdWallet. (2025). Refinancing Your Mortgage: How and When to Do It. https://www.nerdwallet.com/article/mortgages/how-to-refinance-mortgage