How to Read My Reverse Mortgage Statement

If you have a HECM Reverse Mortgage you’ve likely discovered how confusing your monthly HECM Reverse Mortgage Statement can be. Likewise, you’ve probably had the frustrating experience of calling your lender’s customer service number to get no help at all.

My Recommendation:

Call your Loan Officer for help, they will usually be more available and helpful in answering your basic questions. If you don’t have a Loan Officer you trust you’re always welcome to contact me or someone on my team.

• Direct number – 435-465-2882, 
• Email – trevor@heritagehl.com, 
• Website – www.heritagereversemortgage.com 

Key Terms: 

These are the key terms you’ll find on your statement and their meanings.

• Principal Limit = This is another word for your borrowing power. This is the amount of equity in your home that is available for you to borrow. This number increases over time based on the interest rate associated with the loan.
• Current Total Loan Balance = This is how much you actually owe on the mortgage.
• Line of Credit = If you have a line of credit and your loan balance is less than your Principal limit this means you have equity in your home that is available to be borrowed.
• MIP = Annual Mortgage Insurance Premium (Paid to HUD). This is insurance to protect against the possibility of your mortgage exceeding your home’s value.
• Interest = Annual Interest Charge of the Lender
• Servicing Fee = Contact your lender to see if this can be waived. In my opinion this is a junk fee.
• Repair Set Aside = Reserve to pay for required home repairs that weren’t completed before closing your mortgage.
• Tax and Insurance Set Aside = Reserve account to pay annual Taxes and Insurance expenses for the home.

Celink Statement – 

This is the most common HECM Reverse Mortgage Statement. It is generally used by the largest banks such as AAG, Longbridge, Finance of America Reverse, and Mutual of Omaha.

• Contact information – can be found in the upper right hand of the first page.
• Right Below where it says “Statement Period…” or This is Not a Bill there are two boxes:
  • (Left Side) – This gives you the principal limit, set asides and loan balance details.
  •  (Right Side) – This Section outlines your Line of Credit if applicable.
• Interest Rate Information – This section details your Interest rate details
• Periodic Information – This section outlines your actual charges for the period.

Novad/PHH Statement

• Account Information – Details what type of loan you have, when it was established and the property associated with it.
• Interest Rates – Details interest rate amounts and details
• Credit Line Set Aside Information – Outlines Line of Credit and Set Aside details
• Principal Limit Information – Outlines Principal Limit and Loan amount 
• Contact Information – found at the bottom of the first page.

Champion Mortgage Statement

• Contact information – Upper Right
• Account Overview – Outlines loan interest details
• Balance Summary – Outlines Principal Limit and Loan Amount details.

Should you Refinance? … YES!!!!

There are a lot of reasons to look at Refinancing but these are some of the most common.

Benefits of Refinancing

• Lower Interest Rate – Interest Rates peaked in Oct 2023 and have started dropping again. Refinancing to lower interest rates is always a good idea.
• More Stable Interest Rate – Such as a annual adjusting rate vs. a monthly adjusting rate.
• Lower Mortgage Insurance Rate – All HECM’s closed after 2017 should have a .5% MIP Rate. Prior to 2017 may have a MIP rate of 1.25%
• Additional Available Funds – Values go up and rates come down. This could open $20k-$50k in additional available funds.
• Reduced Costs – Most of the costs of your original HECM transfer through to the new loan which means costs of refinancing are dramatically less.
• Updated Terms and Protections – FHA is constantly improving the HECM to make it a better loan and to provide additional protections for the homeowners. Updating the terms of your loan periodically can be very important.
• Change your Lender – If you hate your current lender this might be reason enough to pay them off with a better lender.

Refinancing Makes a good thing Better

The bottom line is we just want to take a good thing and make it better. If you love  your Reverse Mortgage now you’ll love it even more after refinancing to better terms.

Call us if you have any questions about your HECM Reverse Mortgage Statement. Or if you’d like to be put on our Watchlist, we’d be happy to keep an eye on interest rates and your home’s value so you know when it’s time to Refinance your mortgage.