Every month, you receive a mortgage statement from your lender. If you only take a quick glance at it, you might be surprised to learn how much information you can gather from this document. Although the statement may look complicated, it’s meant to be simple to understand, and is organized into specific parts. Below is a quick explanation of the information typically included in each section.
Customer Service InformationThis section of the mortgage statement will provide you with information on how to get in touch with your lender. Typically you’ll see its name, address, phone number, email address and hours of operation. If this information isn’t on the front of your statement, check the back, where companies sometimes place it.
The account number is the lender’s reference number and one you’ll need to know to access your personal account information. So be sure to have it handy when contacting a customer service representative regarding your account.
Principal PaymentThe principal payment is a payment toward the amount of principal owed. Principal is defined as the amount of money owed on the mortgage, not including interest.
It’s important to double-check the principal amount, especially if you’re making extra payments here and there. Even if you don’t make extra payments toward the principal, it’s a good idea to verify your bank statements to ensure the correct amount is withdrawn.
Interest RateThis figure is the rate of interest charged on your mortgage loan. If you have a fixed rate loan, this rate will remain the same for the life of the loan. If you have an adjustable rate, watch for rate changes on your statement.
Interest PaidThe interest paid represents the dollar amount of interest included in the monthly payment. Interest payments do not reduce your outstanding principal balance.
Taxes Paid/Escrow BalanceThis section shows the balance in your escrow account, as well as the property taxes and insurance payments that have been paid from it. Money must be in this account in order to pay property taxes and insurance every year until the home is fully paid off. If you’re paying your insurance and taxes separately, this won’t be represented in the balance.
Past Payment BreakdownThis section highlights how the funds of your payment were allocated for the prior month and year-to-date. Broken down by: Principal Amount, Interest Amount, Escrow Amount, Fees, Total, and Unapplied Amount.
Transaction ActivityDetailed information of fees and charges imposed and/or payments made in the past month.
Total Payment DueTotal payment refers to the amount due for each of the items covered by the payment. The number is typically broken down by principal, interest, escrow and taxes.
Additionally, if you have any overdue payments or other charges, these will typically be expressed here. Be sure to make this payment by the date on the statement or you may be subject to late fees, which could potentially hurt your credit score.
Loan Maturity DateThe maturity date of your mortgage represents the final payment date of the total principal and interest amount due. As a fixed-term loan of typically 15, 20, or most commonly, 30 years, the end of this term is considered the maturity date.
The mortgage statement provides you with valuable information pertaining to the condition of your loan. Knowing how to navigate your statement allows you to better understand your monthly mortgage payments and your overall financial status regarding one of the largest investments you will likely ever make--your home.
Have any questions about your mortgage statement? A ditech Home Loan Specialist can help answer them. Contact a Home Loan Specialist now.