How to Read a Reverse Mortgage Statement
by Lynn Anders ; Updated July 27, 2017Reverse mortgages, available to homeowners 62 and older who have equity in their home, allow homeowners to get cash from that equity without selling their home -- and without making monthly payments as long as the homeowners are still using the home as their principal residence. It works similarly to taking out a line of credit on your home, but with different options for taking out the money, such as with a fixed monthly payment or an open line of credit that you can choose to access at anytime. Likewise, a reverse mortgage statement resembles a line of credit statement.
Look for the current principal limit line on your statement. This is the maximum amount that your principal on the mortgage can reach. If your mortgage reaches this amount, you will not be able to receive any more payments on your mortgage. Near this amount, you should also see the total amount still available to you.
Find the current annual percentage rate. This is the current interest rate being charged to your mortgage for any money you received from the reverse mortgage. This interest gets added to your mortgage loan balance every month.
Read the section with the details of your monthly transactions. This will list all withdrawals or payments made to you, interest and other fees added to your mortgage. This will be added together and your current total principal on the loan will be stated.
Look for any notice of an interest rate change on your monthly statement. If you have an adjustable interest rate, it will adjust each year in the month that you started the reverse mortgage.
