Mortgage rates changed by new mortgage company ??

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IF my mortgage co. sells my house to another mortgage Co….can they raise the rates if my former Com. & I agreed to a fixed rate years ago??


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NO, that is completely and unequivocally illegal. Transferring the servicing of a loan does nothing to change the agreed upon terms, whether it’s interest rate, loan term, or fixed vs. adjustable rate. One item that does come up during servicing transfers is that the new servicer will often do an escrow analysis to determine if enough money is set aside for taxes and insurance. If there is a shortage, you’ll be given the option of writing a check for it, or having it added to your monthly payment, typically catching it up over the course of a year. Hope that helps. Ted

updated 6 months ago
Ted Rood
1310 6
Answered 6 months ago
Ted Rood
1310 6

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The terms of the loan can not change unless both parties agree to a modification. The amount withheld for property tax and home owners insurance may be reviewed at that time or shortly there after.

Answered 6 months ago

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When a mortgage is sold to another servicer, they will often send out advertisements encouraging you to refinance. You are not under any obligation to refinance and the new lender MUST uphold your original mortgage. These “promotions” are a way for the lender to make more money off the loan by getting you to pay for a refinance. Only consider this if there is more than a .5% interest rate difference.

Answered 6 months ago
6 months ago Ted Rood said:
 

Not to play the devil’s advocate here, but there are a number of factors that determine whether refinancing is in a borrower’s best interests. There is no single number (like reducing the rate by .5%) that is applicable for all loans, since life of loan savings are based on both the term of the loan and its size, as well as the costs associated with refinancing. For example, it seldom is prudent to refinance a $50,000 loan (and never for .5% savings) but a .375% rate reduction on a $500,000 loan in which the lender pays all costs makes all the sense in the world.


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