Understanding Your Mortgage Payment

September 24, 2021

Do you need help understanding how your new monthly mortgage payments will work? Or are you still in the planning stages of your new home loan but are trying to learn what to expect? 

Preparing for a home loan means looking at many things starting with your credit score and the cost of your mortgage over the life of the loan but it also means learning what to expect once your mortgage payments start.

It can be challenging to sort through all your home loan paperwork but knowing what you should see on your monthly mortgage bill is crucial. Just as important? 

Knowing what to do if you find errors or other problems on your monthly mortgage statements long if you spot any. Your monthly debt payments may be affected by such issues if they aren't addressed.

From your principal balance to the amount of of the other fees and expenses, you want to ensure your statement is fully accurate. Homeowners who don't may find surprises waiting for them.

The Consumer Financial Protection Bureau, also known simply as “CFPB” has a wealth of advice for consumers to help protect them and their investment in the home--some of that advice? CFPB says you should carefully review your monthly mortgage statement for accuracy each month and to make sure your statement is error-free. 

What should you see on your mortgage bill? According to the CFPB official site:
 

• Customer service contact information the lender/servicer of your mortgage
• The loan amount due
• The loan due date
• The home loan interest rate
• Applicable fees and charges
• Any info about past due payments, late fees, and how much you must pay to bring the account current (in cases where the borrower is delinquent on the mortgage loan for more than 45 days).

Consumers should always review the monthly bill--what happens if you fail to do so and changes show up that you didn’t expect? If you don’t catch the problem right away, you could have a tougher time clearing it up. You should review your statement to make sure the following areas are accurate and current:

Interest Rates
Check the rates on your statement--especially if you have an adjustable rate mortgage. Adjustable rate mortgages feature introductory rates, but those rates will expire. Do you know when that will happen? How long in your loan term before the first adjustment? The last adjustment?

Mortgage Insurance Premiums
Some FHA loans allow cancellation of mortgage insurance after 11 years. Some may not. This depends on the nature of your loan but it’s worth being aware of in any case.

New Fees
Has your lender charged new or modified fees that have affected your monthly payment?

Bank Error
In some cases you could be issued fees by mistake. Always double check.

If you find things you do not recognize or understand about your mortgage bill, contact your lender immediately and do not delay. Some may assume that a fee or charge they don’t anticipate on your mortgage bill each month are supposed to be there and cannot be questioned. Don’t make that mistake--you have the right to ask questions and to have your concerns addressed.

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