After refinance homeowner discovers incorrect loan maturity date once mortgage sold to new lender

Q: My husband and I refinanced our home in 2010. Years later, our mortgage was sold to another lender. I was slow on this but I noticed that the maturity date of the new account is showing eight years beyond when our original mortgage was to end.

I’ve tried to straighten this out with the new lender, but unfortunately I didn’t receive any signed copies of the loan paperwork. I have a folder that was given to me by the processor that says “Borrower’s Copies” but not one of them has a signature on them. I need the original information to argue the maturity date with the new lender. How do I go about getting copies of the original loan?

A: The vast majority of Americans that refinance their homes refinance from one 30-year mortgage to another 30-year mortgage. You refinanced in 2010 and should make your last payment on that loan in 2040. Based on your question, it appears you think the new loan servicer has set your loan termination for 2048.

Now, if you had refinanced in 2010 and took out a 15-year mortgage, the due date of your loan would be in 2025. We’d understand your shock at seeing your loan term extended through 2033. It’s hard to understand how a loan servicer can get these things wrong, but they sometimes do and they make it hard to correct them.

Fortunately for you, you should be able to get a copy of your mortgage document from your local office that handles the filing or recording of real estate documents. For example, your local recorder of deeds office may have an online system where you can download a copy of your mortgage. In some cases, you may not be able to download the document, but may be able to order it online and have it sent to you.

If the office doesn’t have a web page where you can download or buy the document, you may have to stop by their office to view and order a copy of the document. The vast majority of residential loans across the country follow the Fannie Mae/Freddie Mac form documentation. This means that when you get a copy of the mortgage, you should see a paragraph on the first or second page that clearly indicates the date you signed the note and mortgage and the day that you will make the last payment under the note and mortgage.

Once you have a signed copy of your mortgage, you can provide your loan servicer with a copy and they can confirm the due date for your last payment under your loan. And, they should then correct their records.

You’ll also want to verify that your monthly mortgage payment is correct and matches what you should have been paying. What we mean is if you are paying off a loan that is set to terminate eight years later than your original mortgage, you may not be paying the correct amount.

If all else fails, you might want to compare the interest rate you’re paying on your 2010 loan with interest rates today. It might be easier to refinance a loan if rates are better today (hard to imagine, given where interest rates are) than try to fight the servicer on their mistake. You could spend a long time waiting on the phone and getting the runaround. By the way, if you do get the runaround, call the mortgage company’s headquarters and ask to speak to the ombudsman or head of operations’ offices. Both of these people should know how to cut through red tape.

If you choose to refinance, compare your new payment with your existing payment. Run an amortization schedule that compares what you still will pay on your existing loan (principal with remaining interest) with its existing end date with a new loan. Set the payments to pay off the new loan to match your current loan’s end date. This means that the amortization schedule would take the new loan’s interest rate but assume a shorter term for the loan.

If the new amortization schedule shows a significant savings over the loan you have, mostly because you’ve paid down a big part of the loan since 2010, you might want to refinance and save some money. Don’t forget to consider what it costs to refinance. We generally recommend that you should consider refinancing if you can make up the costs of refinancing through the savings on the new loan over six or so months. (Here are our four rules for a home run refinance.)

Something else that occurred to us: Did you believe that when you refinanced your loan in 2010 you were keeping the same maturity date from your original loan? Sometimes people make the mistake of thinking that when they take out a loan with the purchase of a home, say in 2002, and they expect to pay off that debt in 2032. But if you refinanced in 2010, the lender might have reset the repayment clock, so your payoff date would be in 2040, not 2032.

The key is finding your documents. Start there and you should be able to get this mess straightened out.

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(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, a financial wellness technology company. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)