8 Things to Look for on Your Monthly Mortgage Statement
The entire home buying process is a learning experience, and the truth is, you never stop learning once you become a homeowner. Staying informed is so important, especially when it comes to your mortgage. When your first monthly mortgage statement arrives, you’ll notice there is a lot of information to digest – but don’t fret. We’re going to highlight the different sections and what you should be looking for below.
It’s important to note that your monthly statement may vary slightly, depending on your loan servicer. The following details are those that you’ll see most commonly, so use this as a guide when reviewing your individual statement.
1. Customer service details
You’ll typically find this information listed at the top of your statement so you can easily get in touch with your loan servicer if needed. Whether there’s a mistake on your statement, you need help understanding information, or if you think you’ll have trouble making your payment in a timely manner, contacting customer service right away is key to successfully managing your home loan. Don’t see it on the front of your statement? Be sure to check the back, as some loan servicers place additional info there.
2. Loan information
Another section you’ll see near the top contains your account number, property information, interest rate, and loan type. These details – specifically the account number – are needed in order to access your loan information when contacting customer service.
It’s also wise to keep an eye on your interest rate and compare it to the current market interest rates – in some cases, it may be advantageous to refinance your home if the current rate is significantly lower.
3. Monthly payment summary
This summary breaks down the monthly payment that is due so you’ll know exactly how your payment is being appropriated. Usually, you’ll see the following information in this section:
Principal and Interest – The principal is the actual amount of your loan, and the interest is calculated based a percentage of the loan amount.
Escrow – It’s common for tax and insurance funds to be placed in an escrow account, rather than you having to pay these things separately each month.
Past Due Balance – If you have an overdue balance for any reason, it will be carried over into the next month and reflected here.
Other Balances – This is where any other fees or credits would be reflected.
Total Due – This is the amount you are expected to pay for the month, which includes principal, interest, taxes and insurance (PITI), any overdue amounts and the inclusion of any other credits or fees.
4. Principal + interest balance
In this section, you’ll find the total amount that is still owed on your home to date. This number may seem overwhelming, especially if you just purchased your home – but it will steadily decrease over time with each mortgage payment.
5. Escrow balance
Your mortgage company will review your escrow account annually to make sure you’re paying enough for your taxes and insurance for the year. If your property tax or insurance increases or decreases in the new year, your loan servicer will recalculate your total payment and send you a notice ahead of time to alert you of the change.
6. Year-to-date payments
This information provides a snapshot into how much you’ve paid so far in the current year toward principal, interest and your escrow account.
The amount of interest paid for the year will be especially relevant come tax time since you’ll be able to deduct that amount from your taxes.
7. Transaction activity
Here, you’ll be able to view a breakdown of your past payments and how the funds were allocated between principal, interest, taxes, and insurance. This can help you better understand your total payment and how you’re paying down your principal balance.
8. How to pay
Now, for one of the most pertinent pieces of information: how to pay your monthly bill. Most loan servicers provide several convenient ways to make your payment, including:
You’ll likely find that visiting your loan servicer’s website is the easiest way to pay your monthly balance. Many even offer an automatic withdrawal option, so you can choose a date for the payment and it will occur at the same time each month.
Via phone. You can contact customer service and speak with a representative or use an automated system to make your payment.
Via check. Many mortgage companies include a detachable payment coupon that you can mail in along with a check for the payment amount.
In person. If your loan servicer is local, you can also stop by the office and pay via check or credit card.
Most loan servicers will also provide details about credit reporting, late payments, and instructions for making changes to your name, address, or phone number on your statement. Visiting your loan servicer’s website can also provide you with valuable information that may not be covered on your printed statement.