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“My Home Loan Has a Mortgage Rider --What Does That Mean?”

The term "mortgage rider" may sound like a big, brawny man on the back of a motorcycle --and when you're not sure what it means, it can make you feel just as nervous. But there really isn't anything to be wary about, that is, once you understand what a mortgage rider is. 

For us, honesty and clarity is the cornerstone of a great home lending experience, and that's why we feel it's essential that you understand your loan inside and out. 

In this article, find out what a mortgage rider really is, and remember that we are just a phone call away should you have any more questions about getting approved for a home loan. 

What is a mortgage rider? 

Mortgage riders are legal documents that are part of your home loan agreement. As the borrower, you will be required to sign the contingency before your mortgage funds are released. 

Why do I have mortgage rider? 

The mortgage rider includes special terms, conditions, and situations that affect the loan but are not present in the primary mortgage document. A mortgage rider is necessary when there are additional loan terms that are too complex to include into the primary mortgage papers. 

What does a mortgage rider consist of? 

Mortgage riders are about three to five pages long and have standard legal wording similar to the primary loan document. Just like any other legal document, you'll sign and date the mortgage rider. Signing it typically takes place at the same time you sign your mortgage documents. However, unlike the primary mortgage documents, a notary is not required on the rider. 

Are all mortgage riders the same? 

No, some mortgage riders have to do with the financial terms of the loan, while others are meant for specific types of property. For example, a balloon rider indicates that the loan has a balloon payment, or a large part of the principal amount, due at the end of the mortgage term.

A mortgage rider specific to a condominium spells out any unique terms of condominium ownership, like the percentage of ownership in the shared areas. 

Anything else I should know about mortgage riders? 

Mortgage riders are a legal addendum to your mortgage. Though it's a separate document with its own signature, the terms are part of the whole mortgage contract. 

What are the benefits of mortgage rider? 

As the borrower, the mortgage rider helps you by explaining complex loan terms separately from the main loan documents. You'll also appreciate the transparency since the focus is exclusively on the function of the rider. 

While it can sound intimidating, a mortgage rider is just another part of your home loan. And as with any part of the loan process with us, if you there is anything that isn't clear, we are happy to explain it in further detail. 

Ready to work with a mortgage professional you can trust? Call us today and let us know how we can help you!

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