It’s pretty common to hear the terms retained servicing when you are looking to finance a home. You’ll want to make sure that you understand what it is and why it’s important to you. Here’s a brief description that will help you understand why working with a retained servicer is a must when you finance a home.
After you close on your home your loan, it is sold to an investor. This can be a large government sponsored enterprise like Fannie Mae or Freddie Mac or it can be a small credit union who will own your loan. This means they are earning income based on the interest rate on your loan and have loaned you the money to buy your home.
Separate from your investor on your loan is the servicer. The servicer maintains your loan year after year by managing your escrow, taxes and insurance. The servicer is who you send payments to, who you would work with if you couldn’t make a payment and who you would call if you needed to know information about your loan.
The servicer is important because you may have questions about your loan like where to send a late payment, how to deal with an insurance check or why the escrow changed. If you don’t know who your servicer is, you may not know who to contact if you have questions down the road.
With many large lenders and banks, they often sell the servicing again and again. This makes it confusing on who you should call to ask questions or where to send payments.
When you have a company that says they retain servicing, that means they will be the go-to person on assisting you with your escrow, taxes and insurance. They are your servicer for as long as your loan exists. They don’t sell it to another company. You always know who to call and where to send payments. It never changes.
This is an added benefit to working with a lender who is a retained servicer, because you know what to expect years down the road when you might look to refinance or sell your home. There is no confusion on who to call.
Obviously, having a retained servicer is a big deal. You want to make sure that you have this added benefit for long after your closing. Do you know if your lender retains servicing? Make that your first question before you start your home loan application.
It’s the service you’ll need every day for as long as you own your home. For retained servicing, choose CU Members Mortgage for home financing needs.