If you get paperless mortgage statements or have autopay set up on your home loan, or even if you get statements in the mail, it can be easy to miss important information.
By paying close attention to exactly what’s included in your mortgage statements, you’ll avoid unpleasant surprises.
Table of Contents
Key Points
• Mortgage statements are crucial for tracking loan details like balance, interest rate, and fees.
• The Dodd-Frank Act mandates that specific information must be included in these statements.
• Statements detail amounts due, including principal, interest, and escrow.
• They also provide a breakdown of past payments and any fees incurred.
• Contact information for the mortgage servicer is included for customer support.
What Is a Mortgage Statement?
You probably became well versed on mortgage basics during the homebuying process. And you likely did the hard work of using a home mortgage calculator, qualifying for a mortgage, and getting that loan.
But what is a mortgage statement? It’s a document that comes from your home mortgage loan servicer. It’s typically is sent every month and includes how much you owe, the due date, the interest rate, and any fees and charges.
In the past, the information that was included and the format of a mortgage statement varied widely among lenders. Thanks to the Dodd-Frank Act, enacted in 2010, mortgage servicers must now include specific loan information and follow a uniform model for mortgage statements.
Statements also include information on any late payments, how much you’ll need to pay to bring your account back to where it should be, and any late fees you’re dinged with. You can also find customer service information on your mortgage statement.
Mortgage Statement Example
A mortgage statement has elements similar to those on a credit card or personal loan statement. As a picture is worth a thousand words, here’s a mortgage statement example, courtesy of the Consumer Financial Protection Bureau:
How to Read a Mortgage Statement
Deciphering what’s on a mortgage statement can help you understand how much you owe in a given month, how much you’re paying toward interest and principal, and how much you’ve paid for the year to date.
Let’s dig into the different parts of a home loan statement.
Amount Due
This can usually be found at the top of your mortgage statement and is how much you owe for that month. Besides the amount, you’ll find the due date and, usually, the late fee you’ll get hit with should you be too slow with your payment.
Explanation of Amount Due
This section breaks down why you owe what you owe. You’ll find the principal amount, the interest amount, escrow for taxes and insurance, and any fees charged. All of these will be tallied for a total of what you’ll owe that month.
Past Payment Breakdown
Below the section that explains the amount due, you’ll find a breakdown of your past payment: the date the payment was made, the amount, and a short description that may include late fees or penalties and transaction history.
Contact Information
This is typically located on the top left corner of the mortgage statement and contains your mortgage loan servicer’s address, email, and phone number, should you need to speak to a customer service representative. Note that like student loan servicers, a mortgage loan servicer might be different from your lender.
Your mortgage loan servicer processes payments, answers questions, and keeps tabs on your loan payments, and how much has been paid on principal and interest.
You probably know what escrow is. If you have an escrow account, your mortgage loan servicer is also tasked with managing the account.
Account Information
Your account information includes your account number, name, and address.
Delinquency Information
If you’re late on a mortgage payment, within 45 days you’ll receive a notice of delinquency, which might be included on your mortgage statement or be a separate document. You’ll find the date you fell delinquent, your account history, and the balance due to bring you back into good standing.
There should additionally be other information, such as costs and risks should you remain delinquent. There also might be options to avoid foreclosure. One possible tactic is mortgage forbearance, when a lender agrees to stop or reduce payment requests for a short time.
Escrow Account Activity
Many mortgages include an escrow account, from which the mortgage servicer pays the homeowner’s property taxes and/or homeowners insurance. If you have an escrow account, you should see how much of your current payment will go to it listed in the explanation of the amount due. You may also see how much you have paid into it during the past year in the past payment breakdown.
Your lender is also responsible for conducting an escrow analysis each year to assess what your costs will be for the next year. It must let you know the results, what your payments will be in the coming year, and whether your account currently has a surplus or a deficit.
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Understanding the Details
Your mortgage statement includes many details, all to help you understand what you’re paying in interest, the fees involved, and what your principal and interest amounts are. It’s important to look at everything to make sure you understand what information is included. If you have trouble deciphering the information, call your mortgage servicer listed on the document.
If you have an adjustable-rate mortgage, the mortgage statement also might include information about when that interest rate might change.
Important Features to Know
Here are a few key elements related to your mortgage statement to be on the lookout for.
Delinquency Notice
As mentioned, you’ll receive a delinquency notice within 45 days should you fall behind on payments. Besides how much you owe to get back in good standing, the delinquency notice might also include your account history, recent transactions, and options to avoid foreclosure.
Escrow Balance
If you have an escrow account for your mortgage, the balance is how much money you currently have in your escrow account. This may be included in your annual escrow statement. (Your mortgage statement should show what you have paid for the year to date.) If you have difficulty finding your escrow balance, contact your mortgage servicer.
Interest Rate and Loan Term
Your loan’s current interest rate will appear on your mortgage statement. If you have an adjustable rate, you’ll also see the date that the rate will next adjust. Your loan term or the maturity date of the loan may be included on the statement as well. If they don’t and you want the information, contact your mortgage servicer.
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Using Your Mortgage Statement
Now that we’ve covered the elements of a mortgage statement, let’s go over how to use your mortgage statement and make the most of it.
Making Sure Everything Is in Order
Comb through your mortgage statement and check to see that everything is accurate and up to date. Inaccurate information can lead to overpaying, potentially falling behind on payments, and/or other headaches.
Keeping Annual Mortgage Statements
While you might not need to hold on to your monthly mortgage statements for too long, make sure you have access to your annual mortgage statements for a longer period of time. If you run into an IRS audit, you may be required to provide documentation for the past three years.
Making Your Payment
There are a handful of ways you can make payments on your mortgage.
Online. This is probably the most common and simplest way to submit a mortgage payment. It’s usually free, and once you set up an account online and link a bank account to draw payments from, you’re set. You can also set up autopay, which will ensure that you make on-time payments. In some cases, you might be able to get a discount for setting up auto-debit.
Coupon book. A mortgage servicer might send you a coupon book to use to make payments instead of sending mortgage statements. A coupon book has payment slips to include with payments. The slips offer limited information.
Check in the mail. As with any other bill, you can write a check and drop it in the mail. However, sending a payment by snail mail might mean that your payment doesn’t arrive on time. If you are going this route, send payments early and consider sending them via certified mail.
Spotting Errors or Irregularities
If you discover an error on your mortgage statement, it’s important to get it corrected as soon as possible, even if it’s just a misspelling of a street name. To do this, you can start by telephoning your mortgage servicer to report the problem. Some problems the company may be able to fix over the phone.
If the mortgage servicer can’t resolve the issue over the phone, it may ask you to send a letter. This will allow you to document what the problem is and offer any evidence you have to support your case. The provider is generally obligated to make the change or conduct an investigation. The provider also has to let you know what their ultimate decision is.
How Long to Keep Mortgage Statements
Just as you’d want to hold on to billing statements for other expenses, you’ll want to keep your mortgage statements in case you find inaccuracies down the line. Plus, the statements come in handy for tax purposes and for your personal accounting.
So how long should you keep your mortgage statements? Provided you can find your statements online by logging in to your account, you don’t need to hold on to paper statements for long. In fact, you can probably get rid of paper copies if you have access to them online. It might be a good idea to download the documents to your computer.
Other documents, such as your deed, deed of trust, promissory note, purchase contract, seller disclosures, and home inspection report, you should keep as long as you own the home.
Consider holding on to annual mortgage statements for several years in a safe place. It’s a good idea to store them on your computer and have hard copies on hand.
The Takeaway
It’s easy to gloss over mortgage statements, but not knowing what’s in them every month and not noticing any changes can result in costly mistakes. It’s also eye-opening to see how much of a payment goes to principal and how much to interest. Having that information at hand can also be helpful if you are considering a mortgage refinance.
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FAQ
What is a mortgage interest statement?
A mortgage interest statement is a tax form (Form 1098) used to report potentially tax-deductible expenses, including mortgage interest payments. It’s not the same as a mortgage statement, which is a document you receive from your mortgage servicer, usually every month, that shows how much your next payment will be, the due date, and any fees and charges, as well as other information.
How do I get my mortgage statement?
You should receive a statement monthly, either in the mail or via an alert from your mortgage servicer saying the bill is due. If you don’t receive a statement and can’t access it online, contact your lender promptly.
What is a mortgage servicer?
A mortgage servicer is a company that manages home loans. It sends your statement and collects and processes your payment every month, as well as provides customer support. A mortgage servicer may be different from your lender, which is the institution that approved your application and loaned you the funds to buy your property.
What should I check on my mortgage statement each month?
It’s a good idea to review your mortgage statement to ensure that there are no errors or unpleasant surprises. In particular, you’ll want to make sure that your last payment was received on time and check for any potential new or changed fees or rate changes.
Are mortgage statements available online?
In many cases, you can access your mortgage statements on the website of your mortgage lender or servicer.
Can I use my mortgage statement for tax purposes?
If you want to claim a mortgage interest tax deduction on your federal taxes, you can’t use your monthly mortgage statement. Instead, you’ll need to use a 1098, which is the form your mortgage lender or servicer uses to declare how much mortgage interest you have paid in the last year.
Photo credit: iStock/Tijana Simic
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