Why Your Mortgage Lender's Customer Service May Not Matter as Much as You Think

by Christy Bieber | Updated July 19, 2021 - First published on June 6, 2021

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The reason may surprise you.

When you start looking into getting a mortgage loan, there are lots of factors you should consider.

You want to make sure the lender offers the type of loan you're interested in and that you can qualify based on their requirements. You'll also want to ensure that the lender charges low fees and offers you a competitive interest rate.

As you research different mortgage loan providers, you may also be looking into the lender's reputation for customer service. After all, you'll take decades to pay off your loan so it seems smart to find a lender that's easy to work with.

The reality, however, is that your lender's reputation for customer service may not matter as much as you think. That's because they may not handle your mortgage for the entire length of your loan.

Keep reading to learn more.

Your lender may resell your loan

When you get a mortgage loan, in many situations, the lender you end up dealing with over the life of the loan is not the company that actually made the loan.

That's because many mortgage lenders resell loans, and you have no control over this. Lenders may resell loans because they want to be able to lend out money again and they only have so much credit to extend. Or they may prefer to get their profits up front rather than slowly collect interest over the decades when you're paying the loan.

Unfortunately, you have no recourse if they sell your loan to a lender you do not like. While your new mortgage lender can't change any of the terms of your loan, such as your mortgage interest rate or payment timeline, lenders don't have to get your permission to transfer your loan to a different servicer. The only thing they have to do is give you notice when they do it.

The unfortunate reality is that you could spend a lot of time researching which mortgage loan providers have great customer service and could end up with your loan being sold to a lender that you actively didn't want to work with.

And while loan servicers can't change the basic terms of your loan, they can alter things such as the app you use to pay or the payment options they make available to you. So a change to a loan servicer could be a big shift in how things are done when it comes to the process of making your payments.

Since you can't control whether your loan is sold, it often makes sense to focus primarily on getting the most affordable mortgage terms possible since they can't ever be changed no matter who is servicing your loan. If another lender is charging a higher rate but has a better history of providing solid customer service, you probably don't want to choose the lender with better service since you'll have to pay more for your loan while also hoping it doesn't get sold.

If you do end up with a loan servicer that you don't like, unfortunately your only real options are to make sure you know and insist upon your rights as a customer -- or to refinance with a different loan provider and hope your loan isn't sold again.

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