Have you ever wonder what happens after you take out a mortgage? For instance, who manages the loan? Either the mortgage lender will retain your loan servicing or a specialized mortgage servicer will. A sure-fire way to tell is by reviewing your loan statement or payment coupon book.

As servicers, they are responsible for the day-to-day task of the loan.

Tasks include:

• Applying principal and interest
• Property tax payments
• Hazard insurance payments
• Private mortgage insurance payments

The annual escrow analysis is completed by servicers and details how mortgage payments are applied to principal, interest, taxes and insurance. It also explains any adjustments in your payments that will cover property taxes and insurance for the next year. The homeowner will receive any surplus over $50.

As a home owner, you are required to have property insurance on your home for the duration of your mortgage. If there is no escrow account and property insurance has lapsed, the servicer can buy insurance on your behalf (a forced placed policy). If there is a change in your insurance provider, notify the servicer by providing them with a copy of the new policy to avoid the forced placed policy.

Payments are usually due on the first of the month. However, there is usually a 15 day grace period before a late fee is added if you miss the due date. If you feel you can’t make payments, contact your servicer, who will council and assist you to overcome missed payments.

For more information on what happens to your mortgage after you close on your home, our Mortgage Loan Officers are happy to answer any questions you may have.