To switch mortgage banks, first assess your financial needs and compare current rates with potential lenders. Contact new lenders to discuss terms, gather required documents, and submit a refinance application. Coordinate with your existing lender to payoff the current mortgage and close the new loan. Factor in closing costs, appraisal fees, and potential savings from lower interest rates or loan terms.

Switching mortgage banks can save homeowners money by securing better loan terms, such as lower interest rates or reduced monthly payments. According to a 2023 report by the Mortgage Bankers Association, 65% of homeowners who refinanced in 2022 achieved an average interest rate reduction of 1.5 percentage points, saving approximately $150 monthly. Additionally, 43% of refinancers used the equity from their home to pay off high-interest debt, improving their overall financial health. However, refinancing costs, including origination fees and appraisal charges, typically total 2-5% of the loan amount, which may offset savings if rates don’t drop sufficiently. The Federal Reserve notes that homeowners with credit scores above 740 are 30% more likely to qualify for optimal refinance terms, underscoring the importance of credit health during the process. Switching lenders also allows flexibility in loan types, such as transitioning from an adjustable-rate mortgage to a fixed-rate option, which can protect against interest rate volatility. Ultimately, homeowners should weigh savings against costs and consult multiple lenders to ensure a strategic decision.