For one thing, your lender may perceive you as a "slam dunk" and not be very motivated to offer you the most competitive rates. The major factor determining the best choice of lenders for you is your borrowing circumstances (residence type, credit worthiness, income, etc.), and that could very well have changed since you took out your original mortgage. Different lenders will modify their pricing (i.e. interest rate and fees) to different degrees depending on the same factors. That's why you should always shop around and be prepared with a list of your exact needs when you're calling lenders for refinance quotes.

And remember, no one lender can offer the best deal in every situation. Before you sign the papers on that great deal you found with a different lender, give your current lender one more chance to win you back. You may be the hottest number in town with offers from three different lenders. Or you might be a misunderstood misfit who has finally found a mortgage company that appreciates your finer qualities. Either way, you now have some leverage that you can use to negotiate a good deal from your first lender. It might be possible to renegotiate your mortgage at a lower interest rate with your current lender usually for a set fee. Renegotiating a mortgage is technically not refinancing, but it is an amendment to your existing mortgage.

Although the interest rate may not be as low as the current refinancing rate, renegotiating can save you money because you pay no closing costs. If you can't renegotiate with your current lender, shop around and ask for a list of charges to compare interest rates and closing costs. Closing costs vary considerably, depending on factors such as the current mortgage market, lender policies, type of loan, and age of existing loan. The total charges of refinancing usually cost between 3% and 6% of the total amount of the mortgage.