No, you should not skip a payment when your mortgage is transferred. You are still responsible for making your regular mortgage payments throughout the transfer process.
Why You Don't Skip Payments
When your mortgage servicer changes, your loan itself is not paused. Instead, the responsibility for collecting your payments and managing your loan account shifts from one entity to another. It's crucial to continue making your scheduled payments to your old lender until you receive an official, written notice from the new lender detailing where to send future payments.
Understanding the Grace Period
While you must continue making payments, federal regulations provide a significant protection for borrowers during a mortgage transfer. There is a 60-day grace period that begins when the new servicer takes over. During this period:
- The new lender is prohibited from collecting late fees.
- Your loan cannot be declared delinquent if you mistakenly send a payment to the old servicer instead of the new one.
This grace period is designed to protect you from penalties due to potential communication delays or confusion, not to allow you to skip a payment. Its purpose is to ensure a smooth transition and give you ample time to adjust to the new payment instructions.
Essential Steps During a Mortgage Transfer
Navigating a mortgage transfer can feel complex, but following a few key steps can ensure a smooth transition:
1. Before the Transfer
- Be Alert for Notices: Your current lender is typically required to notify you at least 15 days before the transfer date. The new lender will also send a "welcome" notice within 15 days after the transfer. These notices will include the transfer date, contact information for both servicers, and instructions on where to send payments.
- Keep Records: Maintain meticulous records of all payments made, including dates, amounts, and confirmation numbers.
- Update Contact Information: Ensure both your old and new lenders have your most current contact information.
2. During the Transfer Period
- Continue Paying Your Old Lender: As advised, keep making payments to your previous servicer until you receive clear instructions from the new one. This ensures your payments are credited on time and prevents any late charges or negative marks on your credit report.
- Verify Instructions: Once you receive the welcome letter from the new lender, verify the payment address and any new account numbers. If anything seems unclear, contact the new servicer directly.
- Understand the Grace Period: Remember the 60-day grace period for protection against penalties, but do not rely on it as an excuse to delay payments.
3. After the Transfer
- Set Up New Payments: Once you have the new servicer's details, update any automatic payments, online bill pay, or direct debits to reflect the new account information and payment address.
- Monitor Your Account: Regularly check your new mortgage account online or through statements to ensure your payments are being applied correctly and that your loan balance is accurate.
- Contact for Discrepancies: If you notice any discrepancies or have questions, contact your new mortgage servicer immediately. You can also consult resources like the Consumer Financial Protection Bureau (CFPB) for guidance on your rights and how to resolve issues related to mortgage servicing transfers.
Key Takeaways
| Action | Guidance |
|---|---|
| Payments | Continue making payments to your old lender until the new lender provides clear instructions. |
| Grace Period | This is a 60-day protection against late fees/delinquency, not an invitation to skip payments. |
| Documentation | Keep all notices and records of payments. |
| Proactive Steps | Update payment methods with the new servicer promptly and monitor your account. |
