For many homeowners, reviewing their mortgage statement means taking a quick scan to find their payment amount. However, reviewing the information in your mortgage statement can provide valuable details about your loan. Learn what each part of your mortgage statement means and what it can tell you.
What is a mortgage statement?
A mortgage statement is a document from your lender that provides details about your loan. Lenders are required to send a mortgage statement for each billing cycle, which is usually monthly. Your mortgage statement provides up-to-date details about your loan, including:
- Principal balance
- Interest rate changes, if your loan is an ARM loan
- Current payment amount
- Payment breakdown
Other information may also be included, like payment history, property tax information and your escrow balance.
The anatomy of a mortgage statement
Breaking down your mortgage statement into smaller sections is one way to better understand the details. Your lender is legally required to disclose certain information. In the past, mortgage statements varied by lender. In response to the financial crisis in 2008, the Consumer Financial Protection Bureau (CFPB) provided regulations that established the required details on a mortgage statement. The periodic statement regulation from the CFPB requires lenders to send a periodic mortgage statement with the following information:
- Amount due
- Explanation of the amount due
- Past payment breakdown and transaction activity
- Partial payment information
- Contact information
- Account information
- Delinquency information
Understanding the details of your mortgage statement
Your mortgage statement contains a wealth of information to help you keep up with your loan. You can find these details on your statement:
- Mortgage lender information: This includes your lender’s name, address, website and phone number.
- Account number: Your mortgage loan account number is used to identify your account. You'll need to have it handy when you contact your mortgage lender.
- Payment due date: This is the date your payment is due.
- Grace period date: This is the period, typically 15 days after the due date, to make your payment without incurring a late fee.
- Principal balance: Sometimes called the outstanding principal, this is the amount of principal you have left to pay on your loan. This doesn’t include things like accrued interest, escrow amounts due, or late payment fees.
- Interest rate: Interest is the cost to borrow money. It's also sometimes called your mortgage rate.
- Mortgage payment breakdown: This section describes exactly how your payment is applied. Portions of your payment will go toward the principal, interest, escrow and, if applicable, late fees.
- Escrow payment: This part of your payment that is used to pay property taxes and/or homeowners insurance.
- Maturity date: This is the date when the remaining balance on your loan become due.
- Prepayment penalty: Some lenders charge a fee if you pay off your mortgage early, usually within the first three to five years of your loan.
- Important messages: Below your personal details, your lender may provide additional helpful information. This may include instructions for assistance if you have trouble making payments, or information about products, services or resources available to customers.
Features of your mortgage statement you should know
Your mortgage statement contains details for you to be aware of if they apply to your loan situation.
- Delinquency notice: If you're behind on your payments, your mortgage statement will include a delinquency notice. This notice is required when payments are 45 days or more past due. It's important to note that major credit bureaus are generally notified of payment delinquencies of more than 30 days. The delinquency notice will let you know how to contact your lender to discuss options to bring your loan current.
- Escrow balance: An escrow account is designed to hold funds for property taxes and/or homeowners insurance that are paid by your lender. Lenders require you to have a certain amount in this account.
How to use your mortgage statement
Your mortgage statement is a useful document that can help you keep track of your mortgage loan. Review it carefully. Many lenders offer online statements than you can access for several years. If you receive paper statements from your lender, keep them in a safe place in case you need to reference them later on.
1. Review your mortgage statement
Review your statement when you have enough time to go over the important details. During your review, always check for potential discrepancies, or for new information like changes to your payment or escrow.
2. Use your mortgage statement for documentation
If you're considering refinancing your mortgage or selling your home, your most recent statement provides important documentation. It can help to estimate your outstanding balance.
3. Document interest paid with your annual mortgage statement
Lenders are required by the IRS to send out a Form 1098 to most customers who have paid more than $600 in interest during the calendar year. This form is sometimes called a year-end statement and serves as your annual mortgage statement. If you claim tax deductions on your mortgage interest, your tax preparer will need this form.
4. Make payments
Your mortgage statement is designed to remind you to make your payments on time and keep you up to date on your payment details. Payment methods are usually listed on your mortgage statement, and often offer a variety of convenient options. Ways to make your mortgage payment typically include:
- Online payments: Many lenders offer online payment options where you can use your bank account to make your payment. And some lenders may allow you to make your payment using a debit or credit card.
- Automatic withdrawal: Your lender may provide you with the option to have your payment automatically withdrawn from your personal checking or savings account each month.
- Phone payments: Your statement may include a phone number for an automated system to use for making a payment, or you can speak to a customer service representative.
- Payment by mail: If you prefer to pay by check, you can mail it with the payment coupon portion of your statement.
- In-person payments: If your lender has a local branch or office, you may prefer to make your payment in person.
If you need help understanding your mortgage statement, it's a good idea to reach out to your lender’s customer service team. They can explain each section of your statement and what it means.