Congratulations! You made it through the loan process and attended closing where you signed the mortgage documents and received the keys to your new home. So, what happens next to your mortgage?
After your closing, the title company overnights your signed loan documents to your lender’s Post-Closing Department. Your loan file is reviewed for signatures, initials and any extra documentation that was brought to closing. Your mortgage is then certified and sent to an investor which is an organization that purchases mortgage loans from mortgage lenders like First Centennial Mortgage. It’s common practice for lenders to sell mortgages to investors, often government agencies like Fannie Mae or Freddie Mac.
Once your investor has been selected, usually within 24 hours of your closing, your loan is uploaded to their system. The investor reviews your mortgage loan documents and, if necessary, requests your original lender to obtain any clarification or additional supporting documents, from you, the borrower. When all the items on the commitment are satisfied, the investor purchases your mortgage from your lender.
Within 48 hours after the loan is purchased, the right of the loan is transferred to the investor. You will receive a “Goodbye letter” notifying you know that your loan has been sold and where you should make your monthly mortgage payments. Lastly, the county where your new home is located, documents your mortgage loan, which can take up to 60 days.
This all occurs behind the scenes and does not change the terms of your mortgage. Your interest rate, payment amount, type of loan (fixed or ARM), etc. cannot change because your loan has been sold. The only thing that changes is where you make your monthly payments.
And that’s what happens to your mortgage after closing!