Manage Your Mortgage

MANAGE YOUR MORTGAGE

When you borrow money from a lender, you’re making a legal agreement to repay that loan over a set amount of time with levied interest. Now let’s understand your Monthly mortgage statement.

A Mortgage statement usually comes on a monthly basis. The two main parts of a mortgage are the principal, which is the loan amount, and the interest charged on that principal. 

Your statement will contain the following details about your mortgage.

• The amount due
• The due date
• Your Interest rate 
• Fees & Charges 
• Information about any past due payment, late fees, or amount due to bring your account out of delinquency. 
• Customer service contact information for your mortgage servicer

What has to be done every month when your statement arrives:

• Mortgage Servicer

This is the company that manages the payments of your mortgage and sends you the mortgage statement. It might change during the course of the loan, so it is important to know your mortgage servicer. If you have any queries related to your mortgage, they are your contact point.

• The due amount

The amount due on your monthly statement shows how your servicer applies your payments to your loan. “Principal” is the amount you originally borrowed. The part of the amount that goes into your principal is the amount you are repaying for your loan. The other part is your interest, which is the charge you are paying for borrowing the funds from your lender. 

• Additional amounts

If you are paying additional amounts, ensure with your servicer that the additional amount must go into the principal part. By doing so you are repaying your principal which will reduce your interest amounts too.

• Escrow

Escrow is the mount your servicer uses to pay your property taxes and homeowner’s insurance. Not all mortgage has an escrow account, if your loan doesn’t have an escrow account then you need to make arrangements yourself to pay the above-mentioned taxes & insurances directly.

• Check your statements for errors

Check if any new fees or charges have been added. Also, check if your last payment has been posted at the time you have made it. If you see any errors call your servicer and send a notice to the servicer mentioning the errors. Any delay in payment or non-posting of payment made by you can make your loan account delinquent.

• Delinquent accounts

If you make part payments on your account you might not see any decrease in your principal or interest, instead, it will make your account delinquent. You have to make your payments of Instalments regularly on or before the due date.

• Make your Payments in full

Ensure to make full payment of your due amount in time, so that the amount reaches your lender well before your due date for timely posting of your payment.

• Automatic Payments

Consider setting up automatic payments with your mortgage servicer or through your bank or credit union, in order to stay on track with your mortgage.

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