Congratulations! You were able to close on your dream home. After fruitful years of hard work, you’re finally a homeowner. As a new homeowner, you need to keep in mind that paying your monthly mortgage is one of your top priorities until you completely repay the loan. You need to familiarize yourself with mortgage statements as it will become part of your life for years, depending on the type of mortgage you took. Mortgage statements contain important information that you need to leverage to avoid potential problems. Below are some tips to manage your mortgage statements the smart way:
- Identify and confirm the mortgage servicer – The servicer, where you send your monthly payments, can change over time. Make sure to regularly check the upper left portion of your mortgage statement for the information of your servicer. Although your servicer will notify you ahead if they will transfer your loan to another servicer, you may want to make a phone call to verify the information, or search your new servicer using MERS or the Mortgage Electronic Registration System. If you’re curious who owns your loan you can check it through the online lookup tool of Fannie Mae or Freddie Mac.
- Understand the amount due – This is the part of the mortgage statement where you can find the breakdown of the amount you’re about to pay. You normally pay for the Principal, Interest, Taxes, and Insurance or PITI. Those are the components where your payments go to. Your servicer may also charge you additional fees, depending on your loan. It’s important to pay the exact amount or you might receive a delinquency notice on your next statement if you only pay a portion of your previous amount due.
- Regularly review your statement – There could be times that you’ll find new fees that are questionable in your statement. Immediately notify your servicer through a phone call or a written complaint if you think there’s an error in your statement. Keep in mind that some servicers might use different contact information for complaints, so better check their website for details. You can use the Consumer Financial Protection Bureau’s sample letters if you have an error to dispute or you want to request additional information about your mortgage from your servicer.
- Pay the full amount due on time – Your statement will also tell you until when you should pay your monthly dues. Your servicer will give you enough time to pay for your dues, and they can charge you a “late fee” if you pay your dues after the specified date. It’s also important that you ensure your payments go directly to your servicer because you might still get a delinquency notice from your servicer if they don’t receive your timely payments. To avoid late payments, some homeowners find it convenient to use automatic debit payments.
You can get help if you have trouble repaying your mortgage
Because it will take several years before you completely repay your mortgage, there could be instances that you experience financial hardships. Sickness, job loss, and natural disaster could result in missed mortgage payments. If you think you’re in such situation, you need to notify your servicer immediately. Your servicer and a United States Department of Housing and Urban Development (HUD)-approved counselor can offer you loss mitigation options based on your situation.
As a new homeowner, it’s critical that you understand the mortgage statements you receive every month, so you can anticipate and prevent any problems that you may encounter as you repay your mortgage. If you think that you’ll likely miss your mortgage payments, it’s important that you immediately tell your servicer so you’ll know your options on how you can get back on track with your mortgage payments.