Mortgage loans are typically amortized over 30 years. What does this mean? A borrower will pay a combination of principal and interest payments over a 30 year term. The interest is front loaded, so for approximately the first ½ of the loan term, the borrower is paying more interest than principal. Loans typically do not last the full 30 years, as homes are sold or loans are refinanced. By front-loading the interest, lenders are assured profit prior to the loan being paid off. Example: assume a borrower obtains a $300,000 loan at 4.5% on a 30-year fixed mortgage. The monthly...
Category: Mortgage Loans
WHAT HAPPENS TO YOUR LOAN AFTER IT CLOSES?
What happens to your loan after it closes? It is typically sold by the lender. Two sales take place: • The lender will sell the Note, which is the document you sign at closing promising to pay the loan over time; the servicing rights to the loan will be sold. • The servicing rights are the rights to receive the payments on the loan; the servicer is to whom you make the payments. *The buyer of the Note may not be the same as the buyer of the servicing rights. If you are trying to modify a loan, or ask...
August 5, 2019August 5, 2019john