Home Loan Advice & Articles

How to read a mortgage statement

June 08, 2009

If you've never read your mortgage statement, you might be surprised at how much important information can be found in this document, which you probably receive every month from your loan servicer.

A mortgage statement may look complicated, but it's important to understand what the information means. By reading through your mortgage statement section by section, you should be able to find out how your last payment was applied to your loan, the amount and due date of your next payment and much more.

The federal government has provided an example of a basic mortgage statement on the MakingHomeAffordable.com website. This sample mortgage statement highlights and explains some of the important information that may be contained in your mortgage statement.

View Sample Mortgage Statement.


Here’s a quick key to the sample mortgage statement:
#1 shows the name, address and telephone number of the hypothetical borrower's mortgage company, also called the "loan servicer." You should contact your servicer if you have questions about your payment or the information on your statement or if you're concerned about your ability to make your payment. If you don't see the loan servicer's contact information on the front of your statement, check the back. Some servicers put additional important information there.

#2 shows the borrower's loan number. It's helpful to have this number handy if you need to call your loan servicer.

#3 shows the current interest rate on the borrower's loan. This figure is important as a basis of comparison versus current interest rates if you want to refinance your mortgage.

#4 shows the balance of the borrower's escrow account. The  loan servicer taps the escrow account to pay property taxes and homeowner's insurance premiums on the borrower's behalf.

#5 shows the total payment that's due. Be sure to make your payment by the due date shown on your mortgage statement. If you make a payment after this date, you'll be charged a late-payment fee. And, if your loan servicer reports your late payment to the credit bureaus, that can hurt your credit score as well as your bank account.

#6-8 show how the borrower's previous payments were applied to principal, interest and the escrow account. This information can help you understand how your loan works and how you are paying down principal.

Additional information on your mortgage statement 
Your mortgage statement might also include other information. For example, if you have a payment-option mortgage, your statement should show your minimum, interest-only, 30-year and 15-year payment options.

When you’re reading your mortgage statement, also pay attention to any amounts that are listed as deferred interest, escrow shortage or overdraft, overdue or delinquent payment due, unpaid late charges or other terms of this nature. If you have any questions about these amounts, call your loan servicer and ask for assistance.

 

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