sample reverse mortgage statement

Reverse Mortgage Statement – Explanation of Terms:

1. Statement Date: The period that the statement represents. The sample statement displays all of the loan activity that occurred during October.

2. Payment Plan: This is the current payment plan type that has been selected. The borrower selected a “Line of Credit” payment plan option in the sample statement.

3. Loan Number: This is your reverse mortgage loan number. You’ll want to refer to this loan number when you call our Reverse Mortgage Servicing Department for any questions on your loan.

4. Loan Balances: This box details the breakdown of your reverse mortgage loan balance. It also will display any advances or repayments on your reverse mortgage and any finance charges or servicing fees for the past month. If you would like to know your loan balance as of the last day of the statement, look at the figure in the bottom right side of the box.
In the sample statement, the borrower’s total loan balance was $92,092.45.

5. Set Asides: This box represents the balances and any activity that may have taken place with the set-asides on your reverse mortgage. Several types of set asides (Repair set-asides, Tax/Insurance Set Asides, etc.). These set-asides designate some of your reverse mortgage funds for required purposes. For example, if you have funds set aside to complete needed repairs to your home, you will see a figure in the “Repair Set-Aside” column. Not all loan types must have set-asides, so you may not see any activity in this section.

6. Total Available Funds: This box calculates any remaining funds you have available to borrow on your reverse mortgage. In the sample statement, the borrower has a total of $59,845.07 remaining that they can borrow.

7. Line of Credit: This box displays any remaining money available to borrow on the line of credit if you selected a line of credit as part of your payment plan option. In the sample statement, the borrower has $59,845.07 remaining that they can borrow on their line of credit. If you do not like a line of credit as part of your payment plan option, this box will be blank.

8. Interest Rate: This is the breakdown of the interest rate on your reverse mortgage during the statement period. In the sample statement, the interest for October was calculated using 5.16%, and the mortgage insurance premium was calculated using 0.50%.

9. Interest Rate Change Notice: This is a notice to you of any changes upcoming in your reverse mortgage interest rate. The borrower’s interest rate in the sample statement will decrease to 4.97% on December 1st.

10. Finance Charges Current Cycle: This is the total interest and mortgage insurance premium accrued on your reverse mortgage during the statement period.

11. Total Finance Charges: This is the total interest and mortgage insurance premiums accrued since receiving your reverse mortgage. This figure includes the up-front mortgage insurance premium – if applicable – (which was collected at the time of closing) and all of the monthly interest and mortgage insurance premiums accrued on your loan.

12. Servicing Fees Current Cycle: This is the dollar amount of the monthly servicing fee added to the loan balance. This monthly servicing fee is determined at the time of closing.

13. Total Servicing Fees Accrued: This is the total amount of the monthly servicing fees that have accrued since you received your reverse mortgage.

14. Transaction Detail: If you had any transactions (line of credit advances, repayments, accrued interest, monthly scheduled payments, etc.) on your reverse mortgage during the statement period, they are listed here. The sample statement had no activity other than the $467.17 in accrued interest, mortgage insurance premiums, and monthly servicing fee.

Post Closing FAQs


How can I request funds from my Line of Credit?

If you selected a line of credit as part of your payment plan option, you might request those funds by sending a written request to the servicing department. You will receive a Line of Credit draw request form with each monthly statement, provided you have available funds remaining. The draw request form can either be mailed or faxed. If you request the funds be paid by check, please allow 5-7 days for mail delivery time to receive it. Once received, the normal processing time to deposit the funds electronically in your bank or credit union account is 2-3 business days.

What should I do if I have required repairs to be completed?

If you have certain repairs to your home that were required as a condition of receiving your reverse mortgage, you will receive information from us that will be mailed to you within 7-10 days. This letter will provide a step-by-step instruction guide for the repair process. You don’t need to wait for this information before you start the home repairs. You’ll need to get them started as soon as possible to ensure you can complete the repairs by your deadline.

How do I arrange for my payments to be deposited directly into my bank or credit union account?

You don’t need to do anything if you gave me a voided check at the time of your loan closing for this purpose. If you did not provide a voided check at closing and would like to do so, you can mail a voided check and a letter asking that your funds be sent to you via direct deposit to the servicing department. Suppose you want to set up your funds to be directly deposited into a savings account. In that case, you must obtain a letter from your bank or credit union (on their letterhead) listing the savings account number, the bank or credit union’s routing number, and any names on the account. The servicing department will set up your direct deposit when we receive this letter, along with your letter requesting that we set you up on direct deposit. It is important to note that only the borrowers on the reverse mortgage (or financial Power of Attorney) can be listed on the account used to set up the direct deposit. There is no fee charged to you for the direct deposit service.

When will I receive my scheduled monthly payment?

If you elect to receive a scheduled monthly payment as part of your payment plan option, your first payment will be sent to you on the first business day of the month following the funding of your loan. For example, if your loan were funded in November, your first payment would be sent to you on the first day of December. If you are set up on direct deposit, your monthly payment will be in your bank or credit union account on the first business day of each month. If you elected to receive a scheduled monthly payment and requested a paper check, it will be mailed to you on the first business day of each month. It would be best to allow your check a mailing time of 5-7 days.

Who is responsible for paying the property taxes and insurance on my home?

Most reverse mortgage borrowers elect to be responsible for paying their property taxes and insurance on their home. Your taxes and insurance must be kept current at all times, as they could result in a default on your mortgage if they are left unpaid. Reverse mortgage borrowers are only allowed to participate in tax deferral programs in the States of California, Oregon, and Massachusetts. However, looking into local senior property tax exemption programs would be best, which may decrease your annual property tax bill. Please contact the reverse mortgage department if you have any further questions on this issue.

Will I receive an activity statement on my reverse mortgage?

You will receive a monthly statement on the activity of your reverse mortgage. These statements are mailed out by the 5th business day of each month. Because of mailing time, it can take up to 5-7 days after that to receive your statement in the mail. You also will receive an annual report in January of each year detailing all of the activity on your reverse mortgage over the previous year. Suppose you pay your reverse mortgage in full or have paid towards interest or MIP during the past year. In that case, you will receive a 1098 mortgage interest statement by January 31st, which you may use for tax return purposes. Because most reverse mortgage borrowers do not make any payments on their loan, 1098 mortgage interest statements are typically only sent once the loan is paid in full.

I was told that my loan might “grow.” What does that mean?

Depending on the type of reverse mortgage you received, you may experience “loan growth” on your reverse mortgage. This credit line “growth” is simply an increase in the amount of money you are eligible to withdraw if you elected to have a reverse mortgage credit line as part of your payment plan option. To simplify this concept, “growth” is sometimes misdescribed to reverse mortgage borrowers, similar to earning interest on a bank account. Your reverse mortgage is not a bank account and does not earn interest. The “growth” is additional credit that you may receive as time goes on with your reverse mortgage. Not all reverse mortgage loans have this growth feature. Those that do typically experience approximately a 6-7% annual growth in their available funds in their line of credit. However, because changing interest rates affect the level of growth, it is impossible to know what growth your reverse mortgage may or may not have over the life of your loan.

Who owns my home?

You retain full ownership of the property. Your reverse mortgage is simply a loan taken out against the equity in your property. As long as you occupy the home as your principal residence, keep your property taxes and insurance current, and comply with the terms of your reverse mortgage, you will be in no danger of losing your home through the reverse mortgage.

Annual Occupancy Certification

As part of receiving your reverse mortgage, you had to agree that you would live in your home as your primary place of residence, but you can take vacations or leave home for up to 12 months without defaulting on your reverse mortgage. However, please let us know if you will be out of the home for over two consecutive months, so we can keep our records current.

What happens to my reverse mortgage if I pass away or move from the home permanently?

Your reverse mortgage must be repaid when the last surviving borrower on the loan passes away, moves from the home permanently, or does not occupy the home for over 12 months. Depending on the type of reverse mortgage you received, you (or your heirs) may be eligible for time extensions ranging from six months to one year. These time extensions are to be used to provide time to sell the home or obtain a new loan to pay off the balance of the reverse mortgage. If the home is sold for more than the balance of the reverse mortgage, the remaining proceeds from the sale are yours (or your estate) to keep.

Who should I contact for any questions about my reverse mortgage?

Our Borrower Care Associates are available Monday through Friday from 8:00 am to 5:00 pm Eastern Time Zone by calling the toll-free number on your mortgage statement.

If you’d like to learn the reverse mortgage statement reads, contact the toll-free number on your statement or try our Reverse Mortgage Calculator. PS – We also welcome and respond to the comments below…