My husband and I got a great interest rate with a bank that was recently acquired by another bank, which we’re not happy with. A friend at the bank suggested he could transfer our mortgage to another institution. We’re willing to cover any costs associated with moving the loan, but we want to keep our original interest rate. Is it feasible to transfer our mortgage without affecting the rate?
You cannot transfer a mortgage to a new bank while keeping the same terms and interest rate unless the original bank decides to sell the loan to another institution, which is outside of your control. You would need to refinance to move your mortgage to a new lender, which could change your rate.
@Bryn
Could you explain more about how loans are sold? I’m new to this and want to understand my options better.
Azar said:
@Bryn
Could you explain more about how loans are sold? I’m new to this and want to understand my options better.
Banks often sell loans to reduce risk or acquire capital. They do not sell individual loans but rather bundles of loans as part of a larger financial strategy.
@Nuri
Our friend, who’s a bank employee, said he could help us transfer the loan. I wasn’t sure if this would affect our rate.
Azar said:
@Nuri
Our friend, who’s a bank employee, said he could help us transfer the loan. I wasn’t sure if this would affect our rate.
It sounds like your friend may be encouraging you to refinance through him, which would indeed involve a new rate.
@Bryn
He’s actually retiring and has no incentive to have us switch; he’s just been our go-to for advice.
Azar said:
@Bryn
He’s actually retiring and has no incentive to have us switch; he’s just been our go-to for advice.
Even if he’s retiring, he can’t individually transfer a loan to another bank without it going through the proper channels, which includes possible refinancing.
Azar said:
@Nuri
Our friend, who’s a bank employee, said he could help us transfer the loan. I wasn’t sure if this would affect our rate.
Mortgages are sold in bulk, not individually. Your friend cannot simply transfer it, and it’s likely a misunderstanding or miscommunication.
Azar said:
@Nuri
Our friend, who’s a bank employee, said he could help us transfer the loan. I wasn’t sure if this would affect our rate.
The bank servicing your loan doesn’t own it; they just manage it. They can’t transfer it to another bank without a refinance, which would change your terms.
Azar said:
@Bryn
Could you explain more about how loans are sold? I’m new to this and want to understand my options better.
Loan sales are handled at a high level, often involving hundreds or thousands of loans. It’s a strategy decision made at the corporate level, not by individual employees.
@Kiran
Exactly, transferring servicing rights requires coordination across many parts of the bank and is influenced by financial factors not visible at the consumer level.
Azar said:
@Bryn
Could you explain more about how loans are sold? I’m new to this and want to understand my options better.
Your loan is probably owned by a major secondary market entity like Fannie Mae or Freddie Mac, not by your bank. Your bank just manages the payments.
Mortgages are frequently sold among banks. If you’re unhappy, it might just be a matter of time before your loan is sold again to another bank.
Zen said:
Mortgages are frequently sold among banks. If you’re unhappy, it might just be a matter of time before your loan is sold again to another bank.
We’ve been with the new bank since January 2020. It’s been frustrating.
Unfortunately, transferring a mortgage and retaining the same interest rate isn’t something that can typically be done at the customer’s or an individual employee’s discretion. Loan servicing rights are sold in large portfolios.