What happened to your mortgage / loan when you finally get the house, and how is it related to the federal funds effective rate? my very base level understanding is that your mortgage lender sells the loan and it changes hands over and over until it ends up as govt bonds sold to private investors. but it’s not sure about the details or accuracy here. a detailed explanation would be super useful
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
4y
@sina
@Sina Bigdeli- if you loan is a fixed rate - your terms wont change ...your escrow amount for taxes and insurance may be adjusted by the servicer if they change ....if your mortgage is an adjustable - te rate and payment will adjust based on the loans index and margin and caps ...the fed fund rate doesnt affect your loan ...the loan or the servicing of the loan can be sold multiple times ...its is required that the current servicer and the new servicer send you written notice when this happens
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
4y
@sina
@Sina Bigdeli- if you loan is a fixed rate - your terms wont change ...your escrow amount for taxes and insurance may be adjusted by the servicer if they change ....if your mortgage is an adjustable - te rate and payment will adjust based on the loans index and margin and caps ...the fed fund rate doesnt affect your loan ...the loan or the servicing of the loan can be sold multiple times ...its is required that the current servicer and the new servicer send you written notice when this happens
hi dave. Thanks for the response. But my question is more so about the relationship between my loan and the eventual govt bond. My understanding is that the loan changes hands and eventually it ends up in a pile, sold as bonds.
@Sina Bigdeli- if you loan is a fixed rate - your terms wont change ...your escrow amount for taxes and insurance may be adjusted by the servicer if they change ....if your mortgage is an adjustable - te rate and payment will adjust based on the loans index and margin and caps ...the fed fund rate doesnt affect your loan ...the loan or the servicing of the loan can be sold multiple times ...its is required that the current servicer and the new servicer send you written notice when this happens
Lender · Portland, OR · Member since 2018 · 163 posts · 136 votes
4y
@Sina Bigdeli I recently recorded a 30 minute video that explains what you're asking. It also addresses how the Federal Reserve actions are impacting rates. I don't think I can post an outside link in a forum, but I'd be happy to share it with you. PM me and I'll send the link to you.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
4y
none of that really matters...you’ll have a servicer who collects your payments and manages your escrow account, regardless of who buys your loan or what happens to it.