You put in all of the hard work to find a mortgage lender. You get your papers in order, settle up the fees, and get your mortgage. Then you start to enjoy your house, all the while making your mortgage payments. However, one day, you receive a notice that your mortgage gets sold to another lender. What does this mean? More importantly, what do you do now?
What It Means When Your Mortgage Gets Sold to Another Lender
If you’ve never heard of this before then you might feel a bit of panic when you hear that your mortgage gets sold to another lender. Don’t panic. This is actually a very common practice. It doesn’t mean that you did anything wrong. Moreover, it doesn’t necessarily mean that any big change is about to take place.
Mortgage lenders frequently sell the loans they hold to other lenders. It’s all just part of their own business strategy. Ready Nest explains that lenders often bundle a bunch of mortgages together then sell them to free up money to make more loans. In most instances, they sell your mortgage to a government agency like Fannie Mae.
5 Steps To Do When Your Mortgage Gets Sold to Another Lender
Your lender doesn’t need your permission to sell your mortgage. However, they do need to notify you of the chance in advance. Once you receive that letter in the ail that your mortgage gets sold to another lender, take these five actions:
1. Take a Deep Breath
Honestly, this isn’t a big deal. It’s easy to panic about money issues that you don’t fully understand. However, here’s what you need to know: nothing is likely to change about your mortgage itself. You’re not going to owe more money. All of the money you’ve paid still counts. In fact, your mortgage won’t change at all. The only difference is that you’re repaying it to someone else than you originally chose. It’s okay.
2. Look for a Letter from Your New Mortgage Lender
First, you’ll receive a letter from your current mortgage lender. This notifies you of the change. It also lets you know who your new lender will be. Now, keep your eye on the mail. Within a few weeks, you should receive a letter from your new mortgage lender. This letter will provide you with everything that you need to know about making on-time payments with your new lender. Read it carefully. If you have any questions or concerns, call the help number they make available in the letter.
3. Update Your Automatic Payments
Some people write out checks each month to pay their mortgage. If that’s you, then you can just start sending those checks to the new lender’s address. However, most of us automate our payments. Therefore, you must go online to update your autopay settings.
Sometimes you’ve set the payments up through your bank, in which case you’ll log on to your bank to change the information. For example, I might go into my Wells Fargo automated payments section and change the Payee for my mortgage.
On the other hand, you might have auto pay set up on the mortgage lender’s site itself. In that instance, you’ll need to go to your old mortgage lender’s online account to cancel those automatic payments. Then you’ll need to set up an account with the new lender to auto pay through their system.
4. Contact the New Lender After Your First Payment
It’s always a good idea just to make sure that everything goes smoothly in the transition. Make your first payment. Then, about a week later, check in with the new lender to make sure that everything went according to plan. You do get a payment grace period when your mortgage gets sold to another lender. Don’t use this to delay making that payment. Instead, use this time to make sure everything’s set up the way that it should be.
5. Find Out All New Options with This Lender
On one hand, nothing should change with your mortgage. On the other hand, each lender has their own options. Therefore, you might want to find out what options you have with the new lender that you didn’t with the old lender. Review opportunities to refinance. Ask about features, add-ons, and amenities. Even if you don’t take advantage of these things now, it’s a good idea to know your options.
Once everything’s all set and payments go to your new mortgage lender, file your paperwork. Keep it on hand so you can review the terms later if you need to do so.
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