You've spent a lot of time deliberating over your mortgage. You've worked on finding the right lender, looking for the right price, and agreeing on a deal with your mortgage company. After all that, you can find that the company you'll be paying has changed. What do you do if this happens?
Why Are Mortgages Sold?
Selling a mortgage is more common than you'd think. There are three different organizations included in your loan. They are the loan originator, the lending company, and the servicing company. The loan originator, such as NHL Lending, will make their money right away on your loan when you sign up, as they'll get a commission on the sale. The other companies though will have to wait longer to get their money back. This can take up to 30 years, which obviously can be too slow for some companies.
To ensure they have the cash flow needed to lend to other customers, your lending company may sell your mortgage on. Most commonly, they're sold onto government agencies such as Fannie Mae or Freddie Mac. The loans are bundled together with other, similar risk loans, and they'll take on the mortgage for them.
What Does This Mean For You?
So, how does this affect you as the customer? In truth, it won't affect you a whole lot. All you'll have to do is send the check to a different company and address when it comes time to make a payment. You'll still get the same interest rates you agreed to, and you'll still be paying the same amount, for the same amount of time. The type of mortgage won't change either, so if you were looking at jumbo loans Fort Lauderdale, you'll still be paying for a jumbo loan. You'll just be paying a different company now.
If your loan is sold off, you won't have the news sprung on you. You have to be alerted at least 15 days in advance if the mortgage is going to be sold. This alert should let you know who has bought your mortgage, and where you'll need to make payments to. You'll never suddenly be told that your mortgage has already been sold.
Don't worry if you've already sent payment to the old company when this happens. You'll have a 60 days grace period, so you should be fine. If you have any questions, it's best to talk to your loan originator to check what's going on. Here at Nationwide Home Loans, we're happy to help you.
What To Do If You Don't Want Your Mortgage Sold
In some cases, you may not want your mortgage to be sold off. There's a lot of different reasons for this, and sometimes you can take action.
If you already have the mortgage and have started to pay it, then there isn't going to be much you can do. In your contract, you'll find that there's a clause stating that the mortgage can be sold to another company while you're paying it. Because of this, you'll either have to stick with the company you're using or refinance with someone else. This is an option, but it can be draining to have to go through the whole process again.
If you're in the process of signing up for a mortgage, then you do have some options. If you want to ensure that your loan won't be sold off, all you have to do is ask your loan originator. The smaller lenders, such as local banks and credit unions, will happily agree not to sell on your mortgage. Larger lenders may not be as forthcoming, but it's always worth asking.
Selling mortgages happen all the time. 99% of the time, there's never a hitch with the selling process. You'll still be paying the same amount on the same date, with the same interest rate. If you do find there's a discrepancy with payments after a sale though, get in touch with your lender. They'll be able to soon set it straight.
Your mortgage being sold is nothing to worry about. Selling mortgages spur the economy and ensure that other buyers can access funds for their own loans.