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When Is It a Good Idea to Change Home Lenders?

It would be excellent if lenders and borrowers were always a perfect fit when they begin working together. However, this is not the case.

Sometimes buyers encounter situations that may cause them to question whether they need to change home lenders. Perhaps the loan officer they’re currently working with is not able to meet their standards. Or maybe they simply think there’s a better option out there. Not every grievance, however, is necessarily a reason for you to drop your current lender.

Here are some situations in which you’ll want to find a new one.


Finding a Better Deal

It’s best to shop around before picking a home lender. However, sometimes buyers realize that there are other choices with better interest rates and lower fees after they’ve already started working with a lender. It’s not ideal, but it happens.

Chances are, the lender you’re currently working with will not give you a lower rate without a float-down option, which provides you with one opportunity to lower your mortgage rates in the instance of a market decrease.

Therefore, if you find a home lender with better terms, you’ll want to pursue them.



Overlays are a top reason that buyers decide to drop their current lender and find a new one. An overlay is an added requirement imposed by the lender that functions in addition to current guidelines.

Many overlays are designed to protect lenders in risky situations. For example, due to the uncertainty that came as a result of the global pandemic, many buyers have experienced overlays.

Additionally, buyers that have low credit or higher debt-to-income ratio are more likely to face an overlay.

If you find the proposed overlays to be too binding or unreasonable, you may want to find a home lender that is a better fit.


Many Delays

It can be frustrating when your lender is making you wait long periods of time, especially if you have an upcoming or past deadline, such as the end of a lease or if you’ve already sold your home. (Learn more about getting a home loan fast here.)

You may want to find a lender that is more focused on your wants and needs and won’t cause extensive delays.


You Have Multiple Applications

If you have multiple applications open with various lenders, you have numerous options to choose from. You may decide the offer for pre-approval that one lender is offering is superior to the lender you’re actively working with.

If this is the case, you should move forward with the option that looks most appealing to you.


Need Assistance?

Are you looking for a new home lender? Interested in comparing your options? We’d love to chat. Call our office today to get started and speak to a financial expert about your home loan needs.