It's common for lenders to sell mortgages after closing, and you can't prevent it.

A mortgage sale cannot change the terms of your loan, including your interest rate, monthly payment, remaining balance, and repayment schedule.

You have important rights during the transfer, including advance notice of servicing changes and protections if a payment is misdirected during the transition.

While most transfers are routine, it's worth monitoring your account to catch payment or escrow errors early.

It can be frustrating to receive a letter saying your mortgage has been sold to a new company.

The good news is that while a mortgage transfer can be unsettling, it's very common. While you can't keep the change from happening, it usually doesn't affect your mortgage rate, monthly payment and other terms of the loan. Knowing what to expect, understanding your rights and how to protect yourself can make the process much easier to navigate.

Many mortgage lenders are in the business of making loans — not holding them for the next 15 or 30 years. After your loan closes, it's not surprising if the loan is sold several times in its lifetime to another lender, investor or government-backed entity so they can recover their money and make more mortgages.  

In many cases, your loan is securitized or bundled with thousands of others into a mortgage-backed security (MBS), which investors buy on the secondary mortgage market. This behind-the-scenes process happens all the time. It gives lenders fresh capital to finance new homebuyers and helps keep the housing market moving.

A mortgage sale can involve two different things: the loan servicing and the loan ownership.

If the servicing rights are sold, you'll begin making your monthly payments to a new company. The new servicer takes over the administrative responsibilities of your loan, including collecting payments, managing your escrow account, paying property taxes and homeowners insurance, sending statements and assisting with customer service. Before the transfer, federal law requires that you receive a "goodbye letter" from your old servicer and a "hello letter" from your new servicer at least 15 days before the switch.  

If the mortgage itself is sold, another lender or investor becomes the legal owner of your loan. This is common and often happens multiple times over the life of a mortgage as loans are bought and sold on the secondary market. In many cases, homeowners never notice because the same company continues servicing the loan.

If you receive a notice that your mortgage has been sold, the first step is simple: Don't panic. 

While the selling of mortgages is common, it's still important to keep an eye on your information during this transition, as mistakes can happen. These steps can help you navigate the process.

Read the notice carefully. Don't assume the company that sold your loan is still the one handling your payments, as the mortgage owner and servicer may be two different companies. Check whether your servicer is changing, confirm the effective date and make sure your contact information is up to date. 

Confirm where your payments should go. If you use automatic payments, don't assume your existing setup will automatically transfer. If you typically mail your payment, you may have to send it to a new address.

Know the transfer date — and your protections. Check when the old payments should end and when the new ones should begin. If you recently sent a payment to the previous mortgage owner, no worries: federal protections give borrowers a 60-day grace period, which prevents the new servicer from charging certain late fees or treating the payment as late.  

Keep receipts. Keep copies of statements from the months surrounding the sale and the transfer to a new owner. Good records can be your best defense if a payment is misplaced or your account information is incorrect. 

Look for confirmation. After you make your first payment to the new servicer, log in or contact the servicer to confirm it was received and applied correctly. Catching an error early can make it easier to resolve. 

Speak out if something doesn't seem right. Contact your servicer immediately if anything seems off. You should be able to find their contact information on the notice. If the issue isn't resolved, you have the right to escalate the matter with a formal complaint.

Be wary of mortgage transfer scams

Mortgage transfer scams are an unfortunate reality, so it's important to verify any notice before updating your payment information. Watch for red flags such as requests to send payments to a new account immediately. No legitimate lender will send you instructions involving wire transfers or gift cards. Also watch out for contact information that doesn't match your lender's official website.

If you're unsure, contact your current loan servicer using the phone number on your most recent mortgage statement, not the number listed in the notice. You have a 60-day grace period where the mortgage servicer can't charge late fees or report you as delinquent to credit bureaus if you accidentally send your on-time payment to your old servicer.

If you're not sure who currently owns your mortgage, there are several ways to find out:

Check your mortgage statement: Start by checking your monthly statement — these usually include information about your loan servicer (the company that collects your payments). This document provides details about the current owner of your mortgage.

Review closing documents: Look through the papers from closing, including the promissory note and deed of trust. These documents may include information about the original lender and any subsequent transfers of ownership.

Contact your loan servicer: Reach out to your loan servicer directly by phone, mail or through its website. It is legally obligated to tell you who owns your mortgage or if it has been sold to another entity.

Use an online mortgage lookup tool: Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy most mortgages, offer online tools that let you search for your mortgage by entering your loan number or property address. These tools also provide information about your loan servicer and the current owner of your mortgage.

Check with MERS: If your mortgage has been securitized, you can check the Mortgage Electronic Registration Systems (MERS) website. MERS tracks loan servicing and ownership changes for many mortgages in the United States.

While you can't prevent a mortgage servicing transfer, you still have rights as a borrower. If your new servicer has a poor reputation or you run into problems after the transfer, there are steps you can take to protect yourself:

Review the transfer notices carefully. Both your old and new servicer are required under the federal Real Estate Settlement Procedures Act (RESPA) to notify you before and after a servicing transfer. Double-check the effective transfer date, where to send payments and contact information for your new servicer. Keep copies of both notices for your records.

Monitor your account closely. Compare your first few statements with your records to make sure your payment amount, escrow balance and loan terms haven't changed unexpectedly. Save statements, payment confirmations and any correspondence in case you need to dispute an error later.

Know your protections if something goes wrong. Federal law gives borrowers the right to dispute certain servicing errors and request information about their loan. Under RESPA, you can send your servicer a Qualified Written Request if you believe payments have been misapplied or your escrow account is inaccurate.

Assert your rights if your servicer isn't following the rules. If your servicer isn't responding to you, is mishandling payments or is engaging in unfair servicing practices, you can submit a complaint to the Consumer Financial Protection Bureau (CFPB) online or by phone at 855-411-2372. The CFPB forwards complaints to mortgage companies and tracks their responses. State regulators and attorneys general may also be able to  investigate mortgage servicing complaints or enforce state consumer protection laws.

Keep making your mortgage payments. Even if you're disputing an issue, continue making your payments on time if you're able. Missing payments can lead to late fees, credit damage or even foreclosure, making it harder to resolve the underlying problem.

Consider refinancing if it makes financial sense. You usually can't choose your mortgage servicer, but refinancing your mortgage replaces your existing loan with a new one. If you qualify for competitive refinance rates and the costs make sense, refinancing could move your loan to a different lender and servicer. Compare offers from multiple lenders, paying close attention to the interest rate, closing costs and monthly payment to determine whether refinancing would save you money overall.

Keep in mind: Refinancing doesn't guarantee your loan will stay with the same servicer forever. Mortgage servicing rights can be sold again in the future, even immediately after you refinance. The decision should be based primarily on whether the new loan improves your finances, with a different servicer being a potential added benefit.

Can I stop my mortgage from being sold?

No. As a homeowner, you typically can't prevent your mortgage from being sold or transferred, and it's a pretty common practice in the mortgage industry. Under federal law and under the terms of your loan contract (read the fine print), the lender has the legal right to sell the mortgage to another entity, lender or investor.

While you can't stop the sale of your mortgage, you do have rights under the Real Estate Settlement Procedures Act (RESPA) — the law requires your current and new servicers to provide you with notices and information about the transfer. To lower the chance of a future sale, consider choosing a mortgage provider that retains its loans, also known as a portfolio lender.

When your mortgage is sold, does it affect your credit score?

No. Your mortgage being sold to another lender will not impact your credit score. However, it's important to keep an eye on your account during the transition period to ensure all of your payments are credited accurately. If you notice any payment processing errors or discrepancies in your account statements after your mortgage is sold, contact the new servicer and address the problem as soon as possible.

What can you do if your mortgage is sold to a bad company?

If you have a specific concern with the company that now services your mortgage, contact the company to learn your options. You can also file a complaint with the Consumer Financial Protection Bureau (CFPB) online or by phone at 855-411-2372.