## Can a Mortgage Company Drop You?
Yes, a mortgage company can drop you, but only under certain circumstances. Here are the most common reasons why a mortgage company might drop you:
- **You default on your mortgage.** This is the most common reason why a mortgage company will drop you. If you miss payments or fail to meet other obligations under your mortgage contract, the lender may foreclose on your home and sell it to recoup its losses.
- **You violate the terms of your mortgage contract.** In addition to defaulting on your mortgage, you can also be dropped if you violate other terms of your contract, such as failing to maintain insurance on your home or making unauthorized alterations to the property.
- **The mortgage company sells your loan to another lender.** If your mortgage company sells your loan to another lender, the new lender may not want to continue servicing your loan. In this case, the new lender may drop you and require you to get a new mortgage with them.
- **The mortgage company goes out of business.** If your mortgage company goes out of business, your loan will be transferred to another lender. The new lender may not want to continue servicing your loan, and may drop you and require you to get a new mortgage with them.
If you are dropped by your mortgage company, you will need to find a new lender to take over your loan. This can be a difficult process, especially if you have a poor credit score or other financial problems.
## What to Do If You Are Dropped by Your Mortgage Company
If you are dropped by your mortgage company, there are a few things you can do to protect your interests:
- **Contact the new lender immediately.** Find out what the new lender’s requirements are and what you need to do to keep your loan in good standing.
- **Review your mortgage contract carefully.** Make sure you understand all of the terms and conditions of your loan, including the interest rate, monthly payment, and prepayment penalties.
- **Make sure you have adequate insurance.** You should have homeowners insurance to protect your home from damage or destruction. You should also have disability insurance to protect yourself in case you are unable to work and make your mortgage payments.
- **Create a budget and stick to it.** Make sure you have a realistic budget that allows you to make your mortgage payments on time. Avoid unnecessary spending and cut back on expenses where possible.
- **Seek professional help if needed.** If you are struggling to make your mortgage payments, you should seek help from a housing counselor or other financial professional. They can help you create a budget, negotiate with your lender, and explore other options to keep your home.
Being dropped by your mortgage company can be a stressful experience, but it is important to remember that you have options. By taking the right steps, you can protect your interests and keep your home.
## Additional Information
Here are some additional things to keep in mind about being dropped by your mortgage company:
- **You may have to pay a prepayment penalty if you refinance your loan with a new lender.** A prepayment penalty is a fee that you pay to your lender if you pay off your loan early. This fee can be a significant amount of money, so it is important to factor it into your decision when refinancing your loan.
- **You may have to pay closing costs when you get a new mortgage.** Closing costs are the fees that you pay to complete a mortgage transaction. These fees can include things like the origination fee, the appraisal fee, and the title insurance premium. Closing costs can add up to several thousand dollars, so it is important to factor them into your decision when getting a new mortgage.
- **You may have to qualify for a new mortgage if you get dropped by your lender.** This means that you will need to meet the lender’s credit score, income, and debt-to-income ratio requirements. If you do not qualify for a new mortgage, you may have to sell your home.
Being dropped by your mortgage company can be a serious financial setback, but it is important to remember that you have options. By taking the right steps, you can protect your interests and keep your home.