Why would a bank offer refinancing at a lower interest? Is any money saved at all, or is it just paid on a different timeline?
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None of these replies address why a bank would refinance the same mortgage to a lower rate. Fannie, Freddie, fha, and Va are 4 main entities that buy mortgages from lenders. Lenders originate a loan, and sell the “contract” to one of the 4 above (there are others but this is eli5). When they do buy the contract, assuming it was underwritten to their guidelines, they pay a rate premium (commission) up front in order to collect the interest later. Lenders refinance people regardless of the rate or relationship with the previous originating lender, because they collect the premium paid up front from fha, Va, Fannie, Freddie.
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