Here's What Happens When Your Mortgage Loan Servicer Changes

When you sign a mortgage, you may decide to enroll in automatic payments to make the process of keeping up with your loan easier. That way, you don't have to worry about forgetting a payment and being dinged as delinquent, which could negatively affect your credit score and result in late fees.

In time, however, it's possible that your mortgage might be transferred from one loan servicer to another. This is generally not something you have a say in, and it shouldn't impact you other than needing to send your loan to a new payee.

But it's important to pay attention to any notices you get about your mortgage changing hands. That way, you'll know where to send your future payments. And if your payments are set to pay automatically, you'll need to redirect them to your new loan servicer.

A fairly common occurrence

It's pretty common for your mortgage loan servicer to change in the course of you paying off your home. That change won't impact the terms of your mortgage or your monthly payments themselves -- you'll still owe the same amount each month. You'll just need to send your payments to a new loan servicer.

If you have your payments set up to go out automatically, you'll need to update the information on your bank account so your payments start going to the right place. That may be an annoying step to have to take, but once you make it, you should be all set.

You'll get notice

You should expect to receive a notice from both your old and new mortgage loan servicer letting you know your loan is being transferred. Generally, your old servicer should send you this notice at least 15 days before your mortgage is transferred over to a new loan servicer. And your new loan servicer should generally send you a notice within 15 days after the loan is transferred. In some cases, you'll get a joint notice letting you know all of the details of the transfer, including where to send future payments.

It's important to note the date that your loan moves from one servicer to the next so you know where to send your payments. That said, you should know that if you accidentally send a mortgage payment to your old loan servicer within 60 days of the transfer to a new one, your new loan servicer cannot report you as delinquent or charge you a late fee.

If you experienced great customer service from one loan servicer, you may be disappointed to see your loan transferred. But unfortunately, it's really out of your control.

It might happen repeatedly until your home is paid off

All told, there's not much to do when your mortgage loan servicer changes other than redirect your future payments. For better or worse, your mortgage might change hands several times before it's paid off, so you may have to repeat the process of setting up automatic monthly mortgage payments a few times. But other than that, there's really nothing to stress or worry about.

The simple act of having your mortgage loan transferred should not impact your credit score in any way. It also should not affect your ability to refinance your mortgage should you decide that's an option you wish to pursue.