You did it! You reached the closing table, moved in, and began making your new home your own. However, understanding the who’s who in the mortgage process doesn’t end there. When you purchased your home, you probably signed a loan agreement to make regular payments on your mortgage. Chances are, you may receive a letter stating your loan servicer has changed at some point throughout your mortgage term.
What Does a Loan Servicer Do?
A loan servicer provides administrative support for mortgages, including customer service, processing mortgage payments, and in many cases, handling escrow accounts.
When you send in your mortgage payment, your loan servicer processes that payment and distributes a portion of the funds to multiple parties, which can include:
- Your local government to collect summer and winter taxes
- Any investors who bought your mortgage from your initial lender
- Your homeowner’s insurance company
- Your private mortgage insurance company, if applicable, based on your loan agreement
In other words, they act as the main point of contact between borrowers and all other mortgage-related entities to ensure your payments get processed accurately and on time.
Why Doesn’t My Lender Service My Loan?
You built a connection with your mortgage lender as they helped you navigate the home buying process. So why aren’t they the ones who service your loan? Even when loans are serviced in-house, mortgage lending and mortgage loan servicing are often in separate departments. Your mortgage lender’s primary role is to help borrowers choose and apply for their mortgage program, navigate underwriting, and loan closing. Your loan servicer steps in after closing to help with the day-to-day processes that are mainly administrative and customer service based. However, if you had a particularly great experience with your initial lender, you could always keep them in mind when you’re ready to refinance your home.
When to Reach Out to Your Loan Servicer
If you’re making regular mortgage payments, you may not have a reason to reach out to your loan servicer. However, you should contact them immediately if you’re dealing with a financial hardship that could impact your payments. Your loan servicer may be able to adjust your payment schedule or provide additional repayment support. You should also contact your mortgage servicer if you have any questions about your statement or if you were affected by a natural disaster.
Hopefully, this cleared up the who’s who in the mortgage process and what loan servicers do to help with the day-to-day operations after loan closing.
About Mortgage Lender Julie Krumholz from Superior National Bank
Julie Krumholz has been helping homebuyers navigate the mortgage process for over 30 years and has several loan programs available for various incomes and financial situations. She’s experienced nearly every facet of the mortgage industry, from processing, closing, loan origination, underwriting, QC auditing, and even co-owning a mortgage brokerage firm. Julie uses her experience to match homebuyers with the best program for their needs and helps streamline the homebuying process.
Call Julie Krumholz for help with your homebuying needs at 586-382-5482!
