Mortgage Basics
A mortgage is a significant financial commitment. Finding a lender with suitable terms is important and can have far-reaching consequences. You are the legal property owner as long as you pay the loan as per the terms. The lender owns the mortgage note and loan. The property is collateral for the loan.
Ownership and Deferrals
If the original lender holds the mortgage, deferral options are more flexible. Lenders make more money creating and selling loans than holding them. Selling loans provides funds to offer new loans and increase origination fee earnings.
Loan Servicing and Ownership
Mortgage servicers handle payments and other services. Does it matter who owns your mortgage? When evaluating borrowers for a joint mortgage, the lender cares less about who is listed first, and more about the sum of the applicants’ earnings and debts. Chances are, the company that you send your mortgage payments to isn’t the owner of the loan or the original lender.
Importance of Lender Selection
Freddie Mac only buys mortgages that meet its underwriting criteria, meaning that it considers you a good credit risk and your home a worthy investment. It’s crucial to choose a lender with terms that suit your financial situation.
Mortgage Selection
Where you get your home loan matters—it’s not just about the rate. It’s essential to work with a company that can address your specific home loan needs and desires. Community banks are considered a safe choice.