If you want to buy a house, you’ll most likely work with a mortgage lender to secure a loan. After you move in and start making payments, you’ll work with a mortgage servicer.
What Does a Mortgage Lender Do?
Your mortgage lender will provide the money that you need to buy a house. Your lender might be a bank, credit union or government agency. Your credit score, debt-to-income ratio and other aspects of your finances will have to meet a lender’s criteria for you to be approved for a loan.
You get to choose your mortgage lender. You can and should shop around and compare offers from several companies to get a loan with the best terms available.
What Does a Mortgage Servicer Do?
You’ll send your monthly mortgage payments to your loan servicer. It will process your payments and keep track of things like your outstanding balance. If you have an escrow account where money is set aside for property taxes and homeowners insurance, your mortgage servicer will make sure that funds are collected for those purposes and used to pay those bills when they’re due. If you have a question or are concerned about your loan, contact your servicer.
You don’t get to choose your mortgage servicer. Your lender gets to decide which company services its loans. Your servicer might change one or more times while you’re paying off your home loan. If that happens, you’ll send your payments to a different company, but the terms of your mortgage, including the interest rate and length of the repayment period, will remain the same.
If your loan servicer is going to change, you’ll be notified in writing before the switch happens. You’ll be told what to expect and will be given instructions on where to start sending your payments. Your account number may or may not change.
Are a Mortgage Lender and a Mortgage Servicer Different Companies?
It depends. Some financial institutions have different divisions that handle both roles. A lending division processes a borrower’s application and approves a loan, then a different part of the same company assumes the role of loan servicer by processing payments and handling customer service issues. In other cases, a lender processes a borrower’s application and issues a loan, then transfers the mortgage to a different company for servicing.
How Can You Find Out Who Your Mortgage Servicer Is?
If you aren’t sure what company services your home loan, look at one of your recent statements or your payment coupon book. It will have the servicer’s name and contact information. You can also contact your lender to inquire about which company services your mortgage.
Your loan might be registered with the Mortgage Electronic Registration System. If so, you can call or check its website to find information on your loan servicer.
