What Happens to my Insurance if my Home Loan is Sold to Another Lender?

If you’re a homebuyer, or new homeowner, you know that a mortgage is a necessary part of buying and eventually owning your home. It can be alarming to receive a notification that your home loan has been sold to another lender. Luckily, there is nothing to worry about and this happens fairly often.

If your home loan is sold to another lender, it has nothing to do with your payment history or the quality of your loan. The details of your loan will typically remain the same. The original terms and conditions will not change, your interest rate and duration of your load will not change (on fixed rate loans), and your payment schedule should also stay the same.

So is there anything that you as a homeowner need to check on if your home loan is sold to another lender?

Yes.

If your home loan is sold, double-check your insurance information.

If your loan is sold to another lender, call your new servicer to ensure they have all your correct information on file. It’s important to make sure your beneficiary is listed correctly and to double-check whether or not your insurance is sufficient with your new lender.

For example, with flood and hazard insurance, the beneficiary should be transferred from one company to another. Double-check this has happened so that if there is a claim, the check will be sent to the correct servicer.

Some mortgage companies offer to escrow life or disability insurance to pay off your mortgage in case of a death or make payments in case of a disability. If you have these policies, your old servicer should inform you what effect the transfer of servicing will have on this insurance coverage and if there are any decisions you need to make to ensure you have sufficient coverage.

If your home loan is transferred, check the details.

There is no reason to be alarmed or worried if your home loan is transferred from one lender or another–typically these transfer happen without a hitch.


It is still important to check in with your servicer and agent to make sure all the details have been shared with the new lender correctly and that your home loan insurance coverage is still sufficient. Of course, if you have any questions about your mortgage or insurance, contact your lender or insurance agent directly for answers.

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