Mortgage Lenders Vs. Servicers: What's The Difference?

March 10, 2022 at 2:00pm in COVID-19, Homeownership
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Whether you already own a home or are on the path to homeownership, if you’ve been approved for a home loan, you’ll work with a mortgage lender until your loan closes. After the loan closes, you will work with a mortgage servicer. As a mortgage holder you'll want to know who your lender is, who services that mortgage, and what your relationship is with both.

Read on to learn the difference between a lender and a servicer, and who to contact if you are struggling to make your mortgage payments. 

Your Mortgage Lender

A mortgage lender is a bank, credit union, mortgage company, or financial institution that lends money to borrowers so that they can purchase a home. Here are a few examples of what a mortgage lender does:

  • Educates the buyer on different types of mortgages, interest rates, and down payments
  • Handles the application process and approval of the loan
  • Sets the terms, rates, and conditions that the borrower must follow once the loan is approved

Your Mortgage Servicer

After closing on a home, the mortgage servicer’s role begins. You'll send your payment to your servicer who will be responsible for the day-to-day administrative responsibilities that go along with the loan — from sending monthly statements to handling payment processing. 

While your mortgage lender and servicer may be one and the same, this is not always the case. It’s very common for your mortgage lender to sell the right to service your loan to a third-party mortgage servicing company. You may even have different mortgage servicers over the life of your loan.

The Mortgage Servicer's Role

  • Makes sure that the mortgage is paid according to the terms of your note (terms of agreement)
  • May coordinate payment of your taxes if you are paying into a reserve escrow
  • May ensure that your home and flood insurance premiums get paid if you are paying into a reserve escrow

When To Contact Your Mortgage Servicer

  • If you have questions about your loan
  • If you experience financial difficulties that impact your ability to make payments

Your mortgage servicer and their contact information will be listed on your monthly mortgage statement. Click here to learn more about finding your servicer's contact information. 

Struggling To Make Your Mortgage Payments?

In addition to reaching out to your mortgage servicer about loan assistance options, we encourage you to check your eligibility for Alaska Housing Homeowner Assistance.

To see if you qualify visit AlaskaHousingRelief.org before Monday, April 4, 2022 at 11:59 p.m. AKST. 

Additional Resources for Homeowners