If you’ve just bought a home, you may be wondering when you’ll first receive a mortgage statement. This isn’t something you need to organize. You’ll automatically receive an annual mortgage statement as part of your bank’s administrative process. Existing homeowners can also request a current mortgage statement if they require one as documented proof of their mortgage balance. However, your bank may charge you a small fee for sending you an updated version.
But what exactly is a mortgage statement and what information does it provide? Know this information and you’ll know when to request your statement (and pay the fee).
What is a mortgage statement?
A mortgage statement is like a credit card statement. It’s an annual report that is prepared by your bank and sent to you, for your records. The annual statement outlines how much the principal (the original sum of money borrowed) you still owe on your mortgage. It also details how much you’ve paid in taxes and interest over the past calendar year.
On this statement you can expect to see:
- Your contact information as the mortgage holder (mortgagee)
- Your current mortgage balance
- Your current interest rate
- A history of your payments from the date of the last statement
- The amount of time remaining on the mortgage term (known as the maturity date)
- An amortization schedule (showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term)
What should I check on my mortgage statement?
Believe it or not, mortgage lenders and banks can sometimes make mistakes.
It’s important to check your mortgage statement carefully for errors. Also, check to make sure the balance owing is correct. Believe it or not, mortgage lenders and banks can sometimes make mistakes. If you spot a problem or notice a discrepancy, notify your mortgage lender immediately.
The mortgage statement will also tell you how much time you have left until you need to renew your mortgage term. This is the number of months remaining until you need to renew your outstanding mortgage balance. Use this information to review current interest rates and to determine if you should wait until your mortgage term is up or opt to break the mortgage contract, pay the penalty, and renew at a more competitive rate.
When do I need a mortgage statement?
A current mortgage statement is a necessary document if you’re in the process of selling your property or refinancing with another bank. If you’re selling, a mortgage statement provides proof of your existing mortgage and the amount owing to determine the balance you need to pay at closing. A mortgage statement can also serve as the basis for discussion around refinancing options if you wish to swap banks or mortgage products to take advantage of a better interest rate.
If you need to request a statement outside of the typical annual, end-of-year timeframe, your bank or mortgage lender may end up charging you a fee. While this fee can range from $25 to $250, it’s fairly standard as the lender is then required to process your request outside of their standard documentation process.