You spent months contemplating taking out a reverse mortgage. You went through the counseling session, provided the necessary paperwork, had your home appraised and finally closed on the loan. Shortly thereafter, you receive your first “Monthly Reverse Mortgage Statement” in the mail. While your statement may appear complicated at first glance… understanding the information is not too difficult. I’ll explain each line of your monthly statement so you know exactly where your loan – and your finances – stand.
It’s important to remember to carefully review your monthly statement for accuracy. By keeping on top of your reverse mortgage monthly statement, you won’t be faced with any financial surprises and can successfully plan ahead for your upcoming needs.
First, you may notice that the name at the top of your statement isn’t the same as the lender who closed your loan. Since a reverse mortgage is a unique loan, many lenders utilize third party companies that specialize in servicing these types the loans (also called a “sub-servicer”). One of the largest sub-servicer of reverse mortgages in the country is Celink.
Whether your statement comes directly from your lender or from a sub-servicer, it will look relatively the same and contain similar information. This information includes:
- A toll-free telephone number where you can contact your servicer
- Your account number that you will need to provide anytime you contact your servicer
- The Current Payment Plan specifies the method you have chosen to receive your funds. For example, if you have chosen a Line of Credit or a single Lump Sum, your Payment Plan will reflect that.
- The time period that the loan activity covers is called the Statement Period.
- The Current Net Principal Limit represents the total amount of money available to you, whether that’s in your Line of Credit or any monthly scheduled payments due to you.
- If you selected a line of credit as part of your payment plan option, you will see Current Available Line of Credit that represents the money remaining that is available for you in your Line of Credit.
- Your statement will also show the Interest Rate being charged on the outstanding loan balance.
- All transactions during the current period including line of credit advances, accrued interest, monthly scheduled payments and/or repayments will be reflected in the Detailed Transaction Information portion of the statement.
- Your monthly statement will show your Current Outstanding Balance.
Some statements may include additional information such as the Original Line-of-Credit Reserve, any set-aside for taxes, insurance and/or repairs, and a breakdown of the actual charges (i.e. accrued interest, monthly service fee, mortgage insurance premium) incurred to calculate the Current Outstanding Balance.
If there are details of your monthly reverse mortgage statement that you don’t understand, your first call should be the toll-free number on the statement.
Questions about your reverse mortgage loan? Don’t hesitate to contact us.