Frequently Asked Questions
When is my first payment due?
Typically the first of the month following a full month after closing, though this varies. Your closing documents specify the date.
Who do I pay?
The loan servicer, which may differ from the lender who originated the loan. You should receive a welcome letter with instructions.
What is a servicing transfer?
When the right to collect payments moves to a different company. It is common and does not change your loan terms, but it does change where payments go.
How will I know if servicing transfers?
You should receive notice from both the current and new servicer. Confirm before sending payment to a new address — servicing transfer notices are also a fraud target.
Should I set up automatic payments?
Many investors do, both for convenience and to avoid a missed payment. Confirm the servicer's setup process after your first statement.
What if I do not receive payment instructions?
Contact your lender before the due date. Not receiving instructions does not excuse a late payment.
What is an escrow account?
An account holding funds for taxes and insurance, paid by the servicer when due. Whether one is required varies on investor loans.
Do I have to escrow?
Practices vary. Some investor loans waive escrow, leaving you to pay taxes and insurance directly. Either way, those costs count in PITIA.
What if I do not escrow?
You are responsible for paying taxes and insurance directly and on time. Lapsed insurance or unpaid taxes can breach your loan terms.
When does the deed record?
Typically within days of closing, depending on the county. Your title company handles it and you receive a recorded copy.
When do I get my recorded documents?
Usually within a few weeks. Keep them with your entity records — you will need them for future refinances or sales.
What should I do with my closing documents?
File them securely and keep them accessible. Loan terms, prepayment provisions, and entity documents are all referenced later.
Do I need to notify tenants?
On a purchase with tenants in place, yes. Provide notice of the ownership change and new payment instructions per state law.
What about security deposits?
These should have transferred at closing per state law. Hold them according to your state's requirements, which often specify separate accounts.
Do I need to update insurance?
The policy should already name the lender and reflect the correct owner. Verify after closing that everything is accurate.
Can I make extra principal payments?
Usually yes, subject to any prepayment provisions. Check whether partial prepayments trigger any penalty under your specific terms.
What ongoing obligations do I have?
Making payments, maintaining insurance, paying taxes if not escrowed, keeping the property in acceptable condition, and complying with any reporting requirements.
Are there reporting requirements?
On portfolio facilities sometimes yes — periodic rent rolls or operating reports. Standard single-property loans typically have none.
What if I want to sell the property?
Review your prepayment provisions first, since a sale during a penalty period may trigger a charge. Confirm the payoff figure with your servicer.
What is the most useful thing to do right after closing?
Confirm your first payment instructions, verify insurance is correctly in force, and file your closing documents where you can find them in two years.
