Our Mortgage Was Sold After Only One Month
When we signed the closing documents in the middle of April, we were told by our agent, not directly to us, but during a casual conversation, that our mortgage could be sold to somebody else later, but the terms of our mortgage, such as rate and length, etc., should remain the same if the transaction indeed occurs in the future. Though I know such transactions happen quite often in the mortgage industry (for example, small lenders package the loans their originated and sold them to large mortgage companies), I did really expect our loan to be sold when we signed the mortgage paper, at least not this fast.
After making our first mortgage payment in early June, we receive a letter from our lender, Provident Funding Group in California, which I have never heard before (well, I am aware of only a few big names among maybe hundreds of mortgage lenders in the country), informing us that our mortgage has been sold to Wells Fargo Home Mortgage, effective July 1, 2010. Also in the letter is the assurance that, though home loans are transferred frequently in the mortgage industry, the transaction will not affect any term or conditions of the loan and that the only change is the address to which my mortgage payments are made. While it’s good to know nothing will change as I expected, somehow I still don’t like the change, the change of ownership of the loan that is. I had some experience in the past when ownership changed hands and it wasn’t always very pleasant. So I’d prefer things as they are in general. However, for the transfer of my mortgage from Provident to Wells Fargo, it actually comes with a benefit before I even see anything negative, which is a surprise.
Shortly after I received the notice, I went to Wells Fargo’s website to set up an account so I can make further mortgage payments online and after the account was created, I noticed an option to make bi-weekly payments in addition to the more standard monthly payment. This is something I have been looking for years. When we bought our first house in 2004, I specifically asked our lender, Countrywide, whether we could make bi-weekly payments and was told no because we had a 5-year ARM and we had to wait after the first 5 years to have such an option. For this house, Provident said very clearly that the bi-weekly option is not available at this moment without giving any specific reason. So when I saw the bi-weekly payment option, I was pretty excited because with 52 weeks in a year, the bi-weekly option will make a total of 26 withdrawals, equivalent to 13 monthly payment (I set up the payment schedule such that half of the monthly mortgage payment will be withdrawn each time), one more than monthly payment plan and the extra payment will be directly applied to the principal balance. This means that we are building up our equity faster and our mortgage could be paid off earlier than scheduled (we have a 15-year fixed loan). If you always have such an option, it probably isn’t a big deal, but for us, it is because we wanted it for a long time and it is finally available to us in a way that we didn’t expect.
BTW, in addition to using the bi-weekly payment schedule, I also make about $140 extra payment toward the principal in each withdrawal. With this additional payment and the extra one month, we could really own the house much faster
Photo credit: Steve Rhodes
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