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What Is A Mortgage Statement And How To Read It?

Your monthly mortgage statement is an important document that provides a wealth of information about your home loan. By taking the time to understand your mortgage statement, you can stay on top of your home loan and ensure that you are making progress in paying it off. So, let’s go through the details you should know about a mortgage statement. 

What is a mortgage statement?

Mortgage statements are an important communication tool between you and your lender. They are required by law to be provided to you for each billing cycle during the life of your loan. It is important to review your mortgage statement carefully to make sure the information is accurate and up-to-date. 

A mortgage statement is a document that summarizes the payments made on a mortgage loan over a specified period of time. The statement contains the balance of your loan, as well as the interest rate and shows how much principal and interest you paid during the month, and how this affects your overall balance. Also, the statement shows any late fees or other charges, as well as any changes to your escrow account. 

Mortgage statements are usually issued monthly, although some lenders may issue them more or less frequently. 

Remember that any errors or discrepancies should be reported to the lender as soon as possible. And If you believe that there is a mistake, you should contact your lender immediately.

Mortgage statement components

So, let’s go through the main mortgage statement components so that you could understand its structure and the elements you should pay attention to. 

1. Servicer name

It is the company that collects your payments and prepares your monthly statements. The mortgage servicer is an essential partner in ensuring that the loan is paid off on time and that the property remains in good condition. 

2. Account information

It is the number of the loan associated with the name of the borrower.

3. The due date

Mortgage payments are usually due on the first day of the month. Nevertheless, most companies give you a two-weeks period past the due date before charging any fee. Keep in mind, that as long as you make the payment within 30 days of the due date, you can avoid any negative impact on your credit score.

4. If paid after

The “if paid after” amount means a late fee. This fee is charged if you make your payment after the 15th of the month. To avoid paying this fee, try to make your payment by the due date. 

5. Principal amount

The principal amount is the balance on your mortgage that you have yet to pay off. This is the amount you owe unless you make additional payments to pay it off sooner. 

6. Interest rate

Interest is the cost you pay for borrowing money, and it’s calculated as a percentage of your mortgage loan balance.  If you have an adjustable-rate mortgage (ARM), your interest rate may change over time, so it’s important to keep an eye on this section of your mortgage statement. 

7. Prepayment penalty

These are fees charged by lenders to borrowers who prepay their loans. These fees are designed to discourage borrowers from prepaying their loans and, as a result, they can add significant costs to the total loan amount. Prepayment penalties are not allowed on most standard loan programs, including FHA, VA, and conventional loans.

8. Explanation of amount due

This section highlights your monthly mortgage payment details, such as the principal, interest, taxes, insurance, and fees if required. 

9. Transaction activity

This section contains the information on your last month’s payment, and whether you were charged a late fee.

10. Past payment breakdown

By looking at a breakdown of your past payments, you can get a clear picture of how much you are spending on each element. This information can be helpful in making future budgeting decisions.

11. Escrow

This account is used to pay your property taxes and homeowners insurance when they come due. The lender will collect money from you each month to build up the escrow balance, and then pay the bills when they are due. Having an escrow account can help to avoid missed payments and late fees, and it can also make budgeting for these expenses easier. 

So, these were the key elements of a mortgage statement. If you need more details on how it looks, click the link to see a mortgage statement example created by Federal Housing Finance Agency.


How do I get my mortgage statement?

You can get your monthly mortgage statement in one of three ways: online, by mail, or by calling your lender. 

  • If you have an online account with your lender, simply log in and download a PDF of your statement. 
  • If you prefer to receive a paper statement by mail, contact your lender and ask them to add you to their mailing list. 
  • In case you need a statement urgently, most lenders will be able to provide one over the phone. 

What is escrow balance on a mortgage statement?

The escrow balance on a mortgage statement is the amount of money that the borrower has paid into escrow available to be used for property taxes and insurance premiums. The escrow balance is usually updated monthly, and any changes to the property tax or insurance premium can result in a change to the escrow balance. Borrowers should keep an eye on their escrow balance to make sure that there are enough funds available to cover the upcoming property tax and insurance payments. If the escrow balance falls below a certain level, the borrower may be required to make a “catch-up” payment to bring the account back up to date.

How to read a mortgage statement?

Mortgage statements can be confusing, but it’s important to understand what they’re saying. Here are a few tips:

  • Look at the bottom line to understand how much you still owe on your mortgage. This is the number you need to focus on when making your monthly payments.
  • Take a look at the interest rate. This is the percentage of your mortgage that you’re paying in interest, and it will affect how much you owe each month. 
  • Check the due date for your next payment. This is usually listed near the top of the statement. Make sure you make your payment on time, as late payments can result in fees and penalties.

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Most people don’t give their monthly mortgage statement a second glance. But this document is actually packed with important information about your home loan. By taking the time to understand your mortgage statement, you can stay on top of your home loan and ensure that you are making progress in paying it off. In fact, knowing how to read your monthly mortgage statement is an important part of being a responsible homeowner.

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