Process

Loan Servicing

Your loan servicer is the company you send your monthly mortgage payment to and who manages your escrow, statements, and questions. It's often not the same company that originated your loan, and your servicer can change after closing. Your loan terms stay exactly the same when servicing transfers; only the payment address changes.

There’s a Servicing line on page 3 of your Loan Estimate where the lender says whether they intend to keep servicing your loan or transfer it. Transfers are common and completely normal, and they don’t touch your rate, balance, or payment amount.

If your loan is sold to a new servicer, you’ll get a letter telling you where to send payments and when the change happens. The terms you signed are protected. The only thing that changes is who handles the monthly paperwork, so just watch for that letter and don’t miss a payment in the switch.

Related terms

Escrow

Escrow has two meanings in a home purchase. Before closing, it's a neutral account that holds your earnest money and documents. After closing, an escrow account is where your lender collects part of your payment each month to pay property taxes and insurance for you when they come due.

Principal

Principal is the amount you actually borrow, before any interest. Each mortgage payment splits between principal and interest, and early on, most of it goes to interest. As the years pass, more of each payment chips away at the principal, which is how you slowly build equity in your home.

Closing Disclosure

A Closing Disclosure is the five-page form that spells out your final loan terms and costs. Your lender must give it to you at least three business days before you close, so you can check it against your Loan Estimate and make sure the numbers didn't drift. Those three days are your built-in time to review.

Last updated: June 13, 2026

This definition is educational and isn't an offer to lend or financial advice. Rates, programs, and guidelines may change without notice. All loans are subject to credit and property approval.

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