If you have a reverse mortgage, understanding your statement is crucial to managing your loan effectively. Here’s a breakdown of the key sections in your reverse mortgage statement:
Reverse Mortgage Statement – Explanation of Terms
- Statement Date
This represents the period for which the statement is being provided. The sample statement might cover the month of January, for example, showing all loan activities that occurred within that month. - Payment Plan
Your payment plan type determines how funds are disbursed from your reverse mortgage. For example, if you have a “Line of Credit” payment plan, it will be listed here. - Loan Number
Your reverse mortgage loan number is crucial when contacting us about any details or questions. Keep it handy for any inquiries. - Loan Balances
This section provides a breakdown of your reverse mortgage loan balance, including any advances or repayments made and any finance charges or servicing fees for the statement period. - Set-Asides
If funds have been set aside for specific purposes such as home repairs or taxes/insurance, they will be detailed here. Not all reverse mortgages require set-asides, so this section may not appear on your statement. - Total Available Funds
This is the amount of remaining funds that you can borrow against your reverse mortgage. If there are any unused funds left, they’ll be displayed here. - Line of Credit
If you opted for a line of credit payment plan, this box shows how much money is available to borrow. If you didn’t choose a line of credit, this box will be blank. - Interest Rate
The interest rate applied to your reverse mortgage during the statement period will be listed here. For example, the interest for a given period might be 5.16%, with mortgage insurance premiums noted as well. - Interest Rate Change Notice
This notifies you if your interest rate is going to change soon. For example, you might see a notice that your interest rate will decrease from 5.16% to 4.97% on the next payment date. - Finance Charges Current Cycle
This box shows the total interest and mortgage insurance premium accrued during the current statement period. - Total Finance Charges
This total includes all interest and mortgage insurance premiums that have accumulated since your loan began. - Servicing Fees Current Cycle
These are the monthly servicing fees that are added to your loan balance. They are outlined as part of your loan agreement. - Total Servicing Fees Accrued
This represents the total amount of servicing fees that have accumulated since you received your reverse mortgage. - Transaction Detail
This section lists any transactions that occurred during the statement period, such as line of credit advances, repayments, or accrued interest.
Post-Closing FAQs
Q: How can I request funds from my Line of Credit?
If your payment plan includes a line of credit, you can request funds by submitting a written request. You’ll receive a Line of Credit draw request form with each monthly statement, and funds can be transferred directly to your account.
Q: What if I have repairs to complete?
If repairs are required as part of your reverse mortgage, you’ll receive instructions within 7-10 days after your loan closing. You can start the repairs before receiving this letter, ensuring they are completed by the required deadline.
Q: How do I arrange for direct deposit?
If you didn’t provide a voided check at the time of closing, you can send one now along with a request letter to set up direct deposit for your payments.
Q: Who is responsible for paying property taxes and insurance?
Most borrowers handle their property taxes and insurance. These payments must be kept current to avoid default. Some states may offer senior property tax exemption programs, so be sure to explore local options.
Q: Will I receive an activity statement?
Yes, you’ll receive a monthly statement detailing your reverse mortgage activity. An annual report is also sent in January, summarizing the year’s activities, including a 1098 mortgage interest statement if applicable.
Q: What does “loan growth” mean?
Some reverse mortgages have a “growth” feature, which refers to an increase in the available credit over time. This is not earned interest, but rather an increase in your available funds due to specific loan terms.
Q: Who owns my home?
You maintain full ownership of your home. The reverse mortgage is simply a loan taken against the equity in your property. As long as you stay in your home, pay taxes, and comply with the loan terms, your home remains yours.
Q: What happens if I pass away or move permanently?
Your reverse mortgage must be repaid when the last surviving borrower passes away or moves out permanently. However, your heirs may be able to extend the repayment period and keep any sale proceeds beyond the loan balance.
Understanding your reverse mortgage statement is essential for effective loan management. If you have any questions or need assistance, don’t hesitate to contact us.
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