Definition of a Mortgage Statement
A mortgage statement is a document prepared by a mortgage holder and provided to the borrower.
A mortgage statement may also provide a history of payments from the date of the last issuance. The mortgage statement is provided to the borrower periodically, at least annually, and can be provided to the borrower upon request.
Reviewing a Mortgage Statement
Like a credit card statement or credit report, a mortgage statement is an important disclosure document for the buyer for a number of reasons. First, it keeps the borrower aware of the current mortgage balance, allowing the borrower to check the balance for discrepancies. It should be reviewed upon receipt for errors, and if errors are found, the mortgage holder should be notified immediately. Mortgage holders can double check the number appearing on the statements by using mortgage calculators like the ones on this site.
The mortgage statement should provide the borrower with the amount of time left in the mortgage term. Having this information tells the borrower when their mortgage is up for renewal and gives them notice to decide if they want to stay with their current lender or if they want to shop around for a different interest rate.
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Mortgage Statement as Documentation
If a borrower is considering selling the property or considering refinancing with another lender, a current mortgage statement is nearly always required as proof of the approximate existing balance and to determine a payoff balance upon closing of the sale or refinancing.
In most cases, your new lender will accept an annual statement, even if it is several months old. However if there has been a change to the mortgage balance due to a refinance or pre-payment, the lender will require you to obtain a current statement. There may be a small fee charged from your current mortgage holder for updating the mortgage statement. A current mortgage statement is usually on a document checklist of items to provide to the mortgage broker, real estate agent or broker and the seller.
At First Foundation, we can review your current mortgage statement with you and answer any questions you may have. Often, after reviewing the statement and explaining the options available to the borrower, a refinancing of the mortgage can prove to be beneficial to the borrower.
If you are interested in learning more about mortgage statement, please feel free to contact us today!