Explanation Of How To Read A Mortgage Statement

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Your mortgage statement will include the following information: the outstanding amount, interest accrued, interest rate changes (if applicable), and a breakdown of your current and previous payments. For the duration of your mortgage loan, your lender must send you a monthly mortgage statement. If you have this paperwork, you will know exactly where your mortgage money goes each month.

What Exactly Is A Mortgage Statement?

Your monthly payment and other relevant loan information should be easily accessible from your mortgage statement. The law mandates that your mortgage lender or servicer provide you with periodic reports. Mortgage statements are sent out monthly and may be accessed online anytime. Even if you can get your bills online, you may continue using paper statements since mistakes are more evident in print.

What Information Is Included In A Mortgage Statement?

If you have a mortgage, your monthly statement will include the status of your loan, including the sum due, the maturity date (when the loan must be returned in total), and other terms. Moreover, it details various aspects of your past financial transactions. To sum up, these are the main points:

Illustration by Hunter Newton, courtesy of Bankrate and the Consumer Financial Protection Bureau.

Account Number/Loan Number:

This number identifies your loan. The service provider may show it when you log into your account. You'll need to provide this number to your servicer if you get in touch with them.

Payment Deadline:

It's common practice for mortgage payments to be due on the first of the month. If you have automatic payments set up, this date is a helpful reminder of when money will be taken out of your bank account.

Amount Due:

 

Everything must be paid in full before the due date, including the principal, interest, escrow, and fees.

Current due amount: The monthly payment is broken down into its parts, such as principal, interest, escrow, and fees, in this section.

Contact Info:

Here you can find information on how to contact your servicer. Your account information will generally contain your name, phone number, email address, loan amount, interest rate, and maturity date. A prepayment penalty may also be mentioned as the cost you'll incur if you pay off your loan early. The majority of mortgages do not include prepayment penalties.

Activity In Transactions:

This section details the past month's account activity, including any payments received and when they were made.

Previous Billing Breakdown:

To the right, you'll get a rundown of your monthly and yearly payment histories.

How To Handle The Mortgage Statement

You may be tempted to trash your mortgage bills after a while of regular payments, but they contain essential information. When your following statement arrives, please check it very carefully for the following details:

  • Budget and Rate of Interest
  • Deposits held in escrow
  • Money spent on any fees
  • This is a notice of delinquency.

It would be best if you didn't worry about your interest rate changing unless you have an ARM. If you have an adjustable-rate mortgage, your statement will specify how long the current rate will apply. The loan's outstanding principal, or balance, will continue to fluctuate as payments are made. You may utilize the details provided in your statement to make educated choices about releasing equity from your house, re-financing, or selling. Your monthly account may include late mortgage fines if you need to set up automatic payments.

There Is Often A 15-Day Grace Period Before A Lender Starts Charging A Late Fee

 

And while you're at it, check out the escrow payments. These funds are placed in an escrow account to pay annual property taxes and homeowners insurance. Your regular price might go up or down (usually up) over time as premiums and taxes change yearly. When you are 45 days or more behind on your mortgage payments, a "delinquency notice" will be included with your monthly account. Seek assistance from your servicer immediately if this is the case.

Conclusion

The mortgage holder will provide the borrower with a mortgage statement once a year. Essential details about the loan, account activity, and outstanding balances or other monetary obligations for which the borrower is liable are included in this statement. Mortgage statements are sent to borrowers regularly (at least once a year) and more often if requested. Mortgage interest statements, year-end statements, and Form 1098 are all names for yearly statements sent out to homeowners in the United States.

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