When you buy a house and get a mortgage, you generally do so with a specific financial institution. And while many lenders will keep your mortgage for the full term of the mortgage, occasionally the lender will sell your mortgage to another lender or servicer. This transfer impacts who you pay every month, but should not have much impact, otherwise. Your rate, term, payments, escrow, and everything else should remain the same.

The way the process works is your current lender will send you a notice that your loan has been sold. Then, the new lender will send you a letter stating they have taken over your loan. They will send instructions on how to pay them and change over automatic payments, if applicable. There is then a 60 day transfer period, during which time you need to start paying the new loan servicer. It is a generally simple process, which is more an inconvenience than anything else.

If you are in the market to buy a house or are considering refinancing, choosing the right lender is important. Convenience of repayment should certainly be a consideration, but it also should not be the deciding factor. Loans can be sold at any time from any lender, and you don’t want to overpay to have your loan at your local bank, only to have it sold in 3 months.

If you have any questions about buying a house or finding the best interest rates on a mortgage, please contact me. If you have anything else to add about what happens when a mortgage is sold, please leave a comment.