Why is my mortgage being sold?
When you take out a mortgage, your lender may choose to sell your mortgage to another company, which is a common practice in the mortgage industry. There are a few reasons why your mortgage might get sold:
Profit: Your original lender may sell your mortgage to another company for a profit. This is because the lender can package your mortgage with other mortgages and sell them as securities to investors. By selling these securities, the lender can make a profit and use the money to fund more mortgages.
Reduce risk: Lenders may also sell mortgages to reduce their risk. Mortgages are long-term loans, and lenders may not want to hold onto them for the full term. By selling mortgages, lenders can reduce their risk exposure and free up capital to lend to other borrowers.
Compliance: Some lenders sell mortgages to comply with regulations. For example, banks may need to meet certain liquidity requirements, and selling mortgages can help them meet these requirements.
When your mortgage is sold, you will receive a notice from both your old and new mortgage servicers. You will still make your payments to the new servicer, and the terms of your mortgage, such as your interest rate and payment amount, will not change.
* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.