Things you need to be aware about when your mortgage closes.

Quotes:  

"Ultimately the terms of your mortgage assuming you have a fixed rate mortgage your principal interest do not change."

Show Notes:  

[00:06] Introduction to the Houston inside out show.

[00:20] We are talking mortgages and specifically what happens to your mortgage after you close on your home.

[01:30] Those lenders will actually continue to hold your loan and service your loan meaning they're going to continue to collect payment from you. But what commonly happens is that those loans get sold to an entity and they're going to bundle up several of these mortgages into what's called a mortgage-backed security.

[02:20] The quality of these mortgages is extremely important to these investors so the quality will ensure that the mortgage-backed security retains their value. It is so important that the investors will have forensic audits completed on the mortgages that they purchase.

[03:28] Lenders basically turn around and depending on the credit scores, they're going to assign that mortgage-backed security a grade. This is very important to investors because of the lower the grade, the higher the risk. Lenders do not want to buy back a loan.

[04:39] It's a little more challenging to get a loan but it's ultimately to protect everybody involved. That is the buyer, that is the lender, that is the investor, very, very important that the quality of these mortgage-backed securities is much higher than it used to be.

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