Your Mortgage May Be Sold After Closing and Here Is Why That Is Completely Normal and Not a Problem

The Letter That Arrives After Closing and What It Actually Means

You found the house. You signed the papers. You got the keys. Maybe there was a little confetti and champagne at closing. And then a few weeks later a letter arrives saying your mortgage has been transferred to a company you have never heard of.

Do not panic. Here is what is actually happening and why it matters far less than it might initially appear.

Why Mortgages Get Sold After Closing

After closing many mortgages are sold to secondary market entities like Fannie Mae, Freddie Mac, or Ginnie Mae. The reason is straightforward and has nothing to do with anything the borrower did or did not do.

When a lender makes a mortgage loan they are committing a significant amount of capital to that single transaction. If they held every loan they originated on their own books indefinitely they would eventually run out of money to lend to the next family trying to buy a home. Selling loans to the secondary market allows lenders to recover that capital and recycle it into new loans for new buyers. It is how the mortgage system keeps moving.

What Changes and What Absolutely Does Not

As Dave Weston at the Dave Weston Group with Hallmark Home Mortgage explains the transfer of your mortgage to a new servicer or investor changes almost nothing about your loan.

Your interest rate does not change. Your monthly payment does not change. Your payment due date does not change. The amount you owe does not change. The terms you agreed to at closing are the terms you keep for the life of the loan regardless of who owns or services it on the back end.

The only thing that may change is where you send your payment each month. The transfer letter will include the new servicer's payment information and any instructions for how to make your first payment to the new company. Following those instructions is all that is required on your end.

What to Do If You Receive a Transfer Notice

Read the letter. Note the new servicer's name, contact information, and payment address. Make sure your next payment goes to the right place. And that is genuinely the full scope of action required.

If you have questions about buying a home or about what happens after closing reach out to Dave Weston directly. Dave Weston with the Dave Weston Group at Hallmark Home Mortgage is dedicated to helping homeowners build, protect, and transfer real estate wealth.

Sources

ConsumerFinancialProtectionBureau.gov
FannieMae.com
FreddieMac.com
MortgageNewsDaily.com
Investopedia.com