If you are a homeowner, chances are that at some point, you will receive a letter informing you that your mortgage loan servicer has changed.
While this can be unsettling, it is not uncommon, and there are steps you can take to ensure that your mortgage payments continue without interruption.
Mortgage Lenders and Loan Servicers
It is important to understand the difference between mortgage lenders and loan servicers. The lender is the financial institution that provided the loan to purchase your home.
The loan servicer, on the other hand, manages the ongoing payments and transactions once the mortgage is in place. It is not uncommon for a new loan servicer to take over your mortgage over time.
Notification of Change
Your old loan servicer must inform you of the change at least 15 days in advance, giving you time to prepare. Your new loan servicer should send you a notice within 15 days after taking over your loan, including details on where to send your mortgage payments and any changes to the terms of your loan.
Redirecting Payments
It is important to send your mortgage payments to the right place to avoid credit score damage. When a new loan servicer takes over, make sure to redirect your payments to the correct address.
This information should be included in the notice you receive from your new loan servicer.
Automatic Payments
If you have set up automatic payments for your mortgage, you must redirect them to the new loan servicer. Otherwise, you risk missing payments, which can result in late fees and damage to your credit score.
Other Changes
If there are any changes to the terms of your loan, such as interest rate or payment schedule, your new loan servicer should inform you. However, if there are no changes, there is not much else you need to do when a new loan servicer takes over.
Pay Attention to Details
It is crucial to pay close attention to any correspondence you receive regarding changes to your mortgage loan servicer. Make sure to read all letters carefully and take note of any important dates or information.
Changes in your mortgage loan servicer can be unsettling, but they are a normal part of homeownership. By paying close attention to details and redirecting payments to the new loan servicer, you can ensure that your mortgage payments continue without interruption. If you have any questions or concerns, do not hesitate to reach out to your new loan servicer for clarification.
