It’s not often that mortgage companies ever talk about what happens after your mortgage loan closes or gives borrowers information on what to expect after they sign the home loan.
Most mortgages today are not serviced by the company that funds the mortgage. Mortgages are sold on the secondary market to investors. The investors pay servicing companies a fee to manage the payments and so, it’s those companies that the homeowner sends the monthly mortgage payments to.
It’s important to remember that mortgages rarely stay with the same servicer throughout the life of that mortgage. If (or when) your mortgage gets sold to another servicer, they cannot charge you any sort of fee to do so, and servicers cannot change or modify any part of the original mortgage terms.
Your payment can only change if your property taxes increase or decrease, or your home owner’s insurance increases or decreases. You’ll be notified if that happens.
Each year, borrowers will receive an escrow reconciliation statement for their mortgage. It states whether the escrow account is short on funds, which can happen as property taxes increase. If you receive a letter like that, we suggest you pay the shortage instead of having the monthly payment increase, as this will minimize the payment increases each year going forward.
There is much more to cover on mortgage servicers and escrow accounts so look for our other blogs on this topic.