Should I Be Concerned About My Bank Selling My Mortgage?
Buying a home is not an easy process. You have to spend quite a bit of time and energy looking through different mortgage options to find the best option for you and your family. You likely sift through many different mortgage companies to find the one with the best value and customer satisfaction.
You finally sell your house and your lender tells you that they are selling your mortgage. It might rub you the wrong way at first.
What was all that work for?
Don’t be alarmed! We’re here to let you know why it’s not such a big deal if your bank sells your mortgage.
Why Do Banks Sell Mortgages?
The person who you deal with right off the bat, otherwise known as the loan originator, is going to make money as soon as you sign the deal. A lender however, will have to wait the full mortgage term, sometimes thirty years, to make their money.
Instead of waiting years for profit and running out of money, banks will bundle together similar loans and sell them to investing companies. The idea is that the bank will now have the available funds to lend out to the next person in line.
Why Should This Matter To You?
Though it may seem inconvenient to you at surface level, a lender has the whole and legal right to sell your mortgage without any consent from you. They will have to let you know they are doing it at least 15 days before they transfer it to the next company though. The new company will then have a small 30-day window period to send you any new information so that you know when and where to send your payments.
You monthly payments and terms will not change. The only thing that might change is your ability to adjust and modify the terms of your loan, as certain lenders allow for certain modifications over time while others do not.
Don’t Want Your Mortgage Sold?
For the most part, once you sign a contract, you’ve likely sold your rights away to fight against having your mortgage sold. You can either deal with it or try and refinance your mortgage with someone else.
If you haven’t sealed the deal with your lender yet, you can talk to them about taking that selling clause out of the contract. Many big-time lenders won’t agree to that, though if you have a good relationship with a smaller bank or credit union, you might have a better shot at making something work.
Banks sell mortgages all the time. In the time it takes you to pay off your mortgage, it is likely that it will get sold to a different company. In our opinion, you should just let it happen. It’s actually a stimulant for the economy and won’t have a negative effect on your or your finances.
Are you familiar with the process of banks selling mortgages from a lender or homebuyer standpoint? Let us know your experience in the comments!