How to Understand Your Reverse Mortgage Statement

September 23, 2021

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…

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30 Comments on this Article

Elizabeth
April 3rd, 2024

My in-laws are at their principal limit on their reverse mortgage, and the interest will take them above this amount. Do they have to start paying the interest to keep below the limit or will the amount owed continue to grow? Is there risk of foreclosure if you are above the limit?
Reply to Elizabeth
- Michael Branson
  April 5th, 2024
  
  Hello Elizabeth,
  The loan will not become due, and your in-laws will not need to begin making payments on it. They need to keep making the payments on the taxes and insurance (as well as any other property charges such as HOA dues, if any) in a timely manner, live in the home as their primary residence, and maintain the property in a reasonable manner.
  If it has not already, the servicing will soon be transferred to HUD's servicer as the loan will be assigned to HUD, but the loan will be serviced in accordance with the original terms, and nothing should change other than the servicer from whom they receive their statements (and there is a good chance that HUD's contract servicer may have serviced for the prior lender as well).
  Reply to Michael
Betty
October 26th, 2023

How long can you hold the reverse mortgage checks each month?
Reply to Betty
- Michael Branson
  October 26th, 2023
  
  Hi Betty,
  Many checks will indicate that they are void by a certain date or within a certain number of days from the written date. The check must be cashed within that timeframe if it has such a time limit. Without a limit on the check, they are valid for the same amount of time as any other check, which, under the Uniform Commercial Code, is 6 months. After that, the check is considered stale dated, and you would need to get a replacement check.
  I would not recommend holding onto checks for any longer than necessary. Loans are sold and assigned, and it might create a real problem if the check became stale dated and the loan was transferred to a new lender after the check was issued but was never cashed. I'm sure it would be ironed out eventually, but I shudder to think how long it could take.
  Reply to Michael
Alison P.
October 5th, 2023

Hi Arlo! I need to know how much money is available on my hecm line of credit. I can't find a contact.
Reply to Alison
- Michael Branson
  October 5th, 2023
  
  Hello Alison,
  
  You should receive a monthly statement from your lender, which gives you all the information about your loan, including the amount of money remaining on your line of credit monthly. Once you locate the monthly statement, contact the servicer to request funds if you still have available funds. You can also ask them to send you a copy of your original loan documents.
  
  Interest rates have risen significantly over the past 2 years, making refinancing difficult for many reverse mortgage borrowers. Still, if you closed your loan long enough ago and if you have sufficient equity, there is always the possibility that you may qualify for a refinance to obtain more money if there are no funds left on the original line of credit.
  To determine that, you would need to contact us or another licensed lender so that we can run the numbers for you based on your criteria, the value of your home, and current interest rates. If you do not qualify now, you may still qualify later when/if rates come down, and we would be happy to let you know what that would take.
  Reply to Michael
James H.
June 27th, 2023

How long does it take for a payment to show up in the bank account after a direct deposit was set up?
Reply to James
- Michael Branson
  July 17th, 2023
  
  Hello James,
  It's not so much after you set up the ability to make the direct deposits as it is after the lender deposits to your account. You can fill out the paperwork to make the direct deposits at the loan closing, but if the loan is not set up in servicing yet, that loan still needs to be put on the servicing system before the payments are made.
  This is why we tell borrowers that if they think they will need money in the first 30 - 45 days, take it with their loan closing so they don't have to wait. Otherwise, once the loan is set up in servicing, the direct deposit is very quick and can usually be completed in 48 - 72 hours, and I have heard of times when it takes less than that (but I would not count on it being faster).
  Reply to Michael
Sharon B.
March 25th, 2023

Hello Arlo,

I borrowed $25K on my reverse mortgage. I was given an original principal limit of $227,920. The interest accrued on the $25K I borrowed is being taken out of the Reverse mortgage from where? The $227,920? I never understood this. This interest on the money I take out in the future would deplete the $227,920. I was promised to use it for myself.
Reply to Sharon
- Michael Branson
  March 29th, 2023
  
  Hello Sharon,
  The interest accrues and is owed when the loan is repaid. It is not subtracted from the original Principal Limit. In fact, the Principal Limit is growing. Rather than depleting the money available to you, you have more money available to you every year than you have money available in your line that you didn't use.
  The principal limit growth rate is the same as the interest accrual rate plus the mortgage insurance premium (MIP) accrual rate. So, if your current interest rate is 3.5% and your MIP accrual rate is .5%, your line available is growing currently at 4% per year. Based on your numbers, $200,000 would grow by about $8,000 in the first year, and then the next year's growth would be based on a balance of over $208,000.
  Obviously, these numbers are not compounded and don't consider any fees you may have paid, but you get the idea. Each year you don't draw on the line, it would grow even more (assuming the same interest rate). If interest rates increase, the line grows faster; if they decrease, it will grow slower. You should always be able to see your progress on your monthly statement from your servicer.
  The bottom line is that your line is not being used to pay the interest that accrues. That will be paid when the loan is paid off. The money you want to have available for use in the future will be there, and then some with the growth of the line!
  Reply to Michael
Tom
September 14th, 2022

Arizona allows for a Beneficiary Deed to be filed so that the person named on that deed automatically becomes the owner. Can you file a Beneficiary Deed when you have a reverse mortgage?
Reply to Tom
- Michael Branson
  September 18th, 2022
  
  Hello Tom,
  
  This is perfectly acceptable if the title is not changed until after the passing of all borrowers on the loan. These types of Deed as used in several states and are also referred to as "lady bird deeds", and "life estate deeds".
  Reply to Michael
KEV
May 25th, 2022

Does the monthly statement show the total amount spent since day one? Does it show the appraisal of the home? The total amount at which our limit is to borrow? Thank you for your time!
Kev
Reply to KEV
- Michael Branson
  June 10th, 2022
  
  Hello Kev,
  
  You will not find that much detail in the statement. It will show you the balance, the rate, the amount of money you have available to you and if the line of credit is growing, at what rate, etc.
  If you are looking for additional details and you do not have them still from when you started the loan (you should have gotten a copy of the appraisal and a complete closing package at the time), you need to contact your lender and request copies.
  Reply to Michael
Karen M.
February 14th, 2022

My mother in law passed away and she did a reverse mortgage before she passed. My husband is in the process of working with Probate trying to get the property in his name. I am disabled so how can we assume control over the mortgage and make monthly payments to be able to keep our home?
Reply to Karen
- Michael Branson
  February 16th, 2022
  
  Hello Karen,
  
  The reverse mortgage is now due and payable, there is no monthly payment option for that loan. Once the last borrower on the original loan permanently leaves the home, the loan becomes due and payable and the entire balance of the loan must be repaid. However, you do have options.
  Once the title has been transferred to you and your husband, you can choose to refinance the loan with a new loan in your names. If you are old enough, you might even qualify for a new reverse mortgage which would not require you to pay monthly payments. You can also choose to sell the home and use the equity to purchase another property if you feel that the current property does not meet your current needs.
  Reply to Michael
Kathleen
June 2nd, 2020

My mom recently passed. I have no documents regarding the reverse mortgage on the home. How do I discover which bank holds the reverse mortgage? The home is in FL and I reside in MO.
Reply to Kathleen
- Michael Branson
  June 2nd, 2020
  
  Hello Kathleen,
  Is there anyone in the area that is going to the home? Your mom receives a monthly statement for the loan that has all the information on how to contact the lender or their servicer.
  You may be too far to run over and go through mom's papers but surely someone is taking care of the house and her personal property, right? Maybe they can look for the statement on her desk or wherever she keeps her documents.
  There should be a statement coming out any day so if you have already moved to have mom's mail forwarded to your address, you may receive a new statement in the next few days as well.
  Reply to Michael
Michael M.
May 15th, 2020

My son's great grandma has a reverse on the house myself and my son moved in with her now that she's older if she passes away soon how can we get the house and will it cost alot of money up front we love the house and would like to stay can she leave the house to my son or is it the banks if the Bank gets the house how long can we stay before we'd have to move
Reply to Michael
- Michael Branson
  May 15th, 2020
  
  Hello Michael,
  
  The bank has a loan on the property, they do not own it. Your grandmother owns the property and can determine who is to receive it when she passes. I would recommend that you all visit an estate attorney now, before the time comes that her wishes are not known, and you must petition a court to try to get title to the home.
  If you wait until the lender owns the home, then you would be looking to purchase it on the open market just like anyone else. If your grandmother wishes the home to go to you and your son, now is the time to put that plan into effect with a trust or other provisions that an estate attorney can help you complete.
  
  Remember that the loan will become due and payable at that time though. You would need to refinance the loan into a loan in your names or it would be necessary for you to sell the home if that is not possible. But you could take the proceeds from the sale and relocate if there is equity in the property, so it is better than letting the property go into foreclosure.
  If you are not sure if there is any equity in the home, check with a local real estate professional to determine the most likely selling price and compare that to the balance shown as owing on the most recent statement from the reverse mortgage lender. At least this way you will have an idea in advance what you will need to do.
  
  If you choose not to do anything and plan to let the lender take the home instead of trying to repay the loan, the shortest amount of time that a lender can usually take all the steps required and complete a foreclosure from the time a borrower is known to no longer be living in a property is about 5 -6 months but it can often take longer.
  There is no exact time frame and depends on foreclosure laws in your state as well as the time it takes for the lender to complete all the required processes to be sure HUD will honor the reverse mortgage claim for any losses incurred.
  Reply to Michael
Pam
July 23rd, 2013

My sister's and I are needing to look into reverse mortgage for my 83 yr old father. He is in is own home (which we want him to stay in until death) and dealing with a serious brain issue which requires 24/7 care. His money/savings/IRA's are depleting quickly. Would it be to his best interest to take a line of credit or one lump? If we take out only a certain amount and run out.... is it uncomplicated to get more? I am a new learner to reverse mortgage; so any additional information you can give me will be greatly appreciated. Hope to hear from you soon.

Concerned daughter, Pam
Reply to Pam
- Michael Branson
  July 23rd, 2013
  
  Hello Pam,
  Thank you for your interest in All Reverse Mortgage. I received your comments on our blog and I would love to explain all your fathers options. If the property is free and clear the credit line would be most suitable and over time should provide more available funds vs the lump sum while keeping the most retained equity. You have mail :)
  Reply to Michael
robert goldstein
July 15th, 2013

If you want to pay into the account how is that accomplished by check, electronic transfer,???
Reply to robert
- Michael Branson
  August 14th, 2013
  
  Hi Robert,
  That would be up to the servicer but I have heard of borrowers sending checks in to their servicers and asking that they apply the funds to the account. The servicer would not issue a payoff considering those funds until the check had cleared, but that is the only thing that should be the only thing that would be affected by using an ordinary check for paydown.
  Reply to Michael
Delores J. Stewart
May 13th, 2013

We have a reverse mortgage on our home. Before my husband died last summer he said when one of us died we'd need to sell the house. He died before explaining why or how? Do you have any idea why he might have said this. What would be the advantage?
Reply to Delores
- Michael Branson
  May 20th, 2013
  
  Hi Delores,
  
  I'm sorry, I really don't know his reasoning behind this statement. You are responsible for the payment of taxes and insurance and the maintenance on the home and if one of you passing cut out an income stream, perhaps he was concerned the remaining spouse would have a hard time keeping up with those expenses. Other than that, I really do not know why there would be any advantage or disadvantage to selling before one or the other of you passed.
  Reply to Michael
- Michael Branson
  May 21st, 2013
  
  Hi Delores,
  I'm sorry, I really don't know his reasoning behind this statement. You are responsible for the payment of taxes and insurance and the maintenance on the home and if one of you passing cut out an income stream, perhaps he was concerned the remaining spouse would have a hard time keeping up with those expenses. Other than that, I really do not know why there would be any advantage or disadvantage to selling before one or the other of you passed.
  Reply to Michael
Charles Whiteside
March 13th, 2012

Wasn't that the purpose for founding of the Federal Reserve to help the Banks? Federal Reserve sure ain't help'n me and my savings. Obviously, the founding was not too prevent a Great Depression or future depressions. As long as all boats are floating, no problems, right.
Reply to Charles
Lucy M
January 23rd, 2012

I have an available line of credit in the amount of $390.30. Could I request this money now?

Thank you.

Lucy Meyer
Reply to Lucy
- Michael Branson
  January 24th, 2012
  
  Yes. You can request funds from your credit line as much or as often as you like. If you have $390.30 left it is yours to take.
  Reply to Michael

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